fiber optics array

AT&T is looking to expand fiber beyond its traditional local exchange carrier service territory, said AT&T Chief Operating Officer Jeff McElfresh today. He showed considerable passion toward the out-of-region fiber opportunity in a question-and-answer session at an investor conference.

AT&T already did an out-of-region fiber deployment in Mesa, Arizona and apparently is sufficiently satisfied with the results so far to consider doing more of the same.

As McElfresh noted, AT&T operates in two different realms – as a “nationwide wireless company that has a point of presence everywhere [and] distribution everywhere” and as a “fixed wireline based local exchange carrier, telco.”

He sees the company’s nationwide wireless presence as an asset for a potential out-of-region expansion.

“We’ve got a really good wireless market presence, so our brand is known, and we’ve got scale as the largest builder of fiber in this country,” he said.

That fiber service is future proof, he said, and the company has the opportunity to provide an end-to-end fiber connection from the internet to the customer.

“And so having a technology like our fiber . . . in attractive markets gives us the courage and the opportunity to grow beyond our borders,” he said.

Doing so, he said, has the potential to improve return on invested capital in markets with attractive demographics where the company’s wireless network is currently the only thing the company has to offer.

AT&T Out-of-Region Fiber

McElfresh dodged a question about how big the opportunity might be.

“We want to prove we can achieve the returns we believe are possible by expanding our fiber out of footprint and if we prove that and if we’re satisfied with those results, there are plenty of opportunities,” he said.

He also obliquely addressed the interviewer’s assumption that the company would only consider markets without a strong cable and competitive fiber provider, vaguely suggesting that assumption might not be correct.

“This is a scale game, this is hard work—this isn’t easy to do,” said McElfresh. “Others have tried. Large companies have tried, and they’ve left some assets stranded in markets A, B and C. You’ve got to have the physical infrastructure like AT&T has to bear the brunt of what a large fiber investment really requires and that’s what we’re doing.”

McElfresh made his comments at the UBS Global TMT conference. A replay is available at this link.

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