Feeding the Need for Speed: AT&T's Grand $42.5B Plan to Expand Fiber

Aug 21, 2023

AT&T Inc (NYSE: T) is expanding its fiber-optic cable network to deliver fast internet speeds for customers, including those without broadband presence.

AT&T has tapped BlackRock, Inc (NYSE: BLK) and eyes government funding to accelerate the build-out to fund the extravagant expansion worth $42.5 billion as its debt load outstrips its annual revenue, the Wall Street Journal reports.

AT&T and BlackRock have collectively invested $1.5 billion in the Gigapower venture so far.

AT&T will serve as the anchor tenant of the Gigapower network, while other companies could also provide internet service.

Gigapower recently introduced plans to build fiber in Las Vegas, northeastern Pennsylvania, and parts of Arizona, Alabama, and Florida.

Contrastingly, rivals Verizon Communications Inc (NYSE: VZ) and T-Mobile US, Inc (NASDAQ: TMUS) rely on improved technology that beams broadband service from the same cellular towers that link their millions of smartphone customers.

AT&T is testing a similar service on a smaller scale while fiber remains the long-term focus.

It incurred $24 billion on its fiber and 5G networks in 2022 and eyes a similar level of spending in 2023.

The telco giant wants its fiber network to cover over 30 million homes and businesses within its current service area by the end of 2025.

In April, AT&T reported first-quarter FY23 operating revenues of $30.14 billion, up 1.4% year-over-year, marginally missing the consensus of $30.26 billion.

The Consumer Wireline segment had 272 thousand of AT&T Fiber net adds.

Price Action: T shares traded lower by 0.30% at $16.61 in the premarket on the last check Thursday.

Photo by Tdorante10 via Wikimedia

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