- AT&T's new agreement with Corning is certainly good news for the fiber vendor after some time struggling with sales due to excess inventories
- AT&T is on a big push to message and market its fiber broadband expansion
- The service provider is hinting that it will expand its fiber deployment to potentially reach 45 million locations
There's nothing like kicking off the week with a billion-dollar deal. This time around, Corning is the benefactor. AT&T has sent a strong message that it's all-in on fiber networks via an expanded, multi-year purchase agreement with Corning to support the acceleration of its fiber network. The deal certainly backs up the Fiber Broadband Association's assertion that the has industry has turned a corner — for the better.
Those listening closely to AT&T CEO John Stankey back in September may have anticipated this deal when AT&T and BlackRock announced they wanted to grow their Gigapower fiber joint venture more than originally planned. Then, AT&T also announced four new partnerships to expand its fiber network faster. At the Goldman Sachs Communacopia conference, Stankey spoke about AT&T’s fiber ambitions, saying, "My scale ambition is to be first and biggest as we go through this cycle that allows us to call more shots as the industry forms and plays over time.”
If you enjoy following the fiber saga, you'll remember that Gary Bolton, president and CEO of the Fiber Broadband Association, wrote in his most recent quarterly note: “What a difference a quarter makes! In the first half of 2024, FBA reported that the supply side of the fiber industry continued to struggle as network operators worked down COVID-related excess inventory. The exciting news is that FTTH-related inventory has largely normalized."
Exciting news, indeed. AT&T says its newest agreement with Corning is now valued at more than $1 billion, although the company declined to specify the time range that the deal encompasses. The Dallas-based service provider says it’s the nation’s largest fiber internet provider based on the number of fiber-to-the-home households, according to publicly available data. And it’s on a major push to get even bigger.
Betting on numbers
Last week on the company’s 3Q 2024 earnings call, AT&T reported 226,000 fiber net adds, during the quarter. The company now passes more than 28 million locations with fiber and remains on track to pass 30 million locations by the end of 2025.
“The better-than-expected returns we're seeing on our fiber investment potentially expand our opportunity to go beyond our initial build target by roughly 10 million to 15 million additional locations,” said AT&T Chief Financial Officer Pascal Desroches on the call.
Stankey stressed that AT&T is expanding its broadband ambitions through organic investment in its network and also through its Gigapower joint venture with BlackRock and several recently announced commercial open-access agreements. He indicated that AT&T is working with open-access providers with an eye toward developing a model that it could, if it chooses, repeat in other places.
Corning's win-win
AT&T says that because it is Corning’s largest customer it gets preferential volume purchasing benefits. The Corning products that AT&T will use will be compliant with the National Telecommunications and Information Administration’s (NTIA’s) Build America, Buy America provisions of the Broadband Equity, Access and Deployment program (BEAD).
This is the second big announcement for Corning this year. In August Corning said Lumen Technologies was reserving 10% of Corning’s global fiber capacity for the next two years. The agreement marked Lumen’s largest fiber optic cable purchase — ever.