AT&T (T.US) abandons copper cables and bets on optical fiber: competing for the “overtaking lane” in the era of surging traffic

The Zhitong Finance App learned that American telecom giant AT&T (T.US) executives said they would accelerate the strategic shift and explained the strategic logic of abandoning copper fixed telephone lines and investing in optical fiber cables instead. Chief Financial Officer Pascal Desroches (Pascal Desroches) said on a Bloomberg TV program today that “optical fiber has the fastest transmission speed,” and “it also has the lowest maintenance costs compared to traditional copper cables that we have continued to upgrade until now.”

This telecom giant, headquartered in Dallas and whose history can be traced back to the origin of telephone communication, is currently urging users to abandon copper lines, which cost the company 6 billion US dollars in maintenance costs every year. AT&T is laying fiber-optic cables on a large scale to meet surging demand for traffic, including next-generation data-intensive artificial intelligence tools.

“The advantage of fiber is symmetry,” CEO John Stankey (John Stankey) explained in a joint interview. “Its upstream and downstream data transmission volumes are exactly the same.”

AT&T has adopted a three-pronged user coverage strategy: 5G mobile networks, fixed wireless services to provide wireless access to homes, and optical fiber lines are its core investment direction. In May of this year, AT&T announced the acquisition of Lumen Technologies Inc.'s consumer optical fiber business for US$5.75 billion. If approved by the regulations, the deal is expected to be completed in the first half of next year, which will help AT&T enter major cities such as Denver and Las Vegas and advance the achievement of its expansion goals.

Stanky said, “We will add about 4.5 million new active home users that have already been covered and connected, and the scope of this business is expected to expand to nearly 10 million households. All of these regions have considerable investment value.” The company has set a goal: by 2030, fiber will cover 60 million homes in the US, and that number could rise to 70 million thereafter.

DeRoche pointed out that replacing aging copper cables with optical fiber can reduce energy consumption by 70%, reduce maintenance costs by 35%, and also generate cash benefits by selling copper metal. He added, “There are still lots of copper cables buried underground. At current prices, this will bring considerable returns.”

AT&T also believes that this transformation will increase its share of the wireless phone market; currently, its total number of users lags behind Verizon (VZ.US) and T-Mobile US (TMUS.US). According to the data, over 40% of AT&T fiber optic users also subscribed to its wireless phone service.

“I don't like to rank third in any field; this is the original intention of our reforms.” De Roche confessed.