-
Wolfe Research predicts the U.S. fiber subscriber count to increase from 22 million today to approximately 45 million by 2033
-
TD Cowen estimates AT&T will gain the bulk of U.S. FTTH passings through 2027
-
Analyst Craig Moffett said the real question is how much fiber will ultimately get built, due to increasing capital costs
What does the future of fiber look like in the next five to 10 years? Signs point to yes on more homes passed, with a few big-name ISPs reaping the rewards.
Analysts at Wolfe Research predict the U.S. fiber subscriber count will double over the next decade, from approximately 22 million today to about 45 million by 2033. The firm expects fiber-to-the-home penetration to increase from 45% to 65% - 80% in that time period.
The penetration metric is on par with the Fiber Broadband Association’s (FBA) estimate that roughly 46% of U.S. locations (~52 million) are currently serviceable by fiber.
FBA calculated that percentage from the FCC’s broadband map, which was last updated with ISP data as of June 30, 2023.
Wolfe Research analysts said 46 million suburban, small market and rural homes “with just one gig+ competitor (i.e., cable) present the largest opportunity” for fiber ISPs to reach higher penetration, as the cost per passing for many of these locations would be less than $1,500.
As for who has the most to gain from an industry shift to fiber, Wolfe Research pointed to Frontier, followed by AT&T and Verizon.
In Frontier’s case, the company last year inked a $2.1 billion asset-backed securitization deal – the first public company in the U.S. to do an ABS deal for FTTH assets.
Recon Analytics founder Roger Entner also mentioned AT&T and Frontier as providers that are poised to take advantage of the increase in fiber subscribers and penetration. Altice USA, Lumen and “a host of smaller providers” stand to gain something as well.
“If T-Mobile seriously enters the fiber market it will also succeed,” Entner told Fierce Network.
Furthermore, he said, “Fiber is a popular choice for home broadband technology. We will see increases both in markets that are currently mostly served by cable and in BEAD markets where there is only internet connectivity below 100 Mbps.”
TD Cowen estimates total U.S. FTTH passings will climb to 72.8 million this year, with AT&T taking the bulk of the share (23.7 million), followed by Verizon (18 million) and Frontier (7.6 million).
By 2027, AT&T is still expected to remain on top with 28.3 million fiber homes passed, and Verizon and Frontier to have 19.2 million and 10.1 million FTTH passings, respectively. Total U.S. FTTH passings will reach an estimated 91.4 million in 2027, TD Cowen predicts.
The future's not completely clear-cut
However, the real question isn’t what kind of penetration FTTH will get, it’s “how much will ultimately be built,” said MoffettNathanson Analyst Craig Moffett.
“Over the next few years, fiber overbuilders will face spiraling labor costs pushed higher by BEAD, and falling market attractiveness as denser and aerial markets are depleted,” he told Fierce. “With “higher for longer” capital costs, the ROI of overbuilding is only going to get worse.”
Of course, fiber isn’t the only option on the table, as WISPs have presented fixed wireless access (FWA) as a cheaper alternative to fiber and cable.
“FWA is a significant alternative that is even more popular than fiber and can make an even bigger impact bringing competition to the broadband market if the government allocates more spectrum to the mobile industry,” Entner added.