AT&T’s legacy as a local exchange carrier (LEC), combined with its nationwide fiber network, will give it an advantage in backhaul connectivity for 5G wireless by minimizing 5G backhaul costs, said AT&T Senior Executive Vice President and Chief Financial Officer John Stephens at an investor conference today.
“We have a lot of fiber to the premises and to business locations,” said Stephens. “We’re in a different situation than competitors because of our extensive fiber footprint. We’re in a unique position to do backhaul cheaper, especially when you layer on FirstNet.”
FirstNet is the nationwide mobile broadband public safety network that AT&T will be building.
Stephens noted, for example, that AT&T’s LEC business spans 20 states, offering a deep fiber footprint in those states.
In preparation for 5G, the company also will be deploying fiber to 7 million more customer locations by July, bringing the total number of AT&T fiber locations from 15 million to 22 million, he said. The 22 million locations include 14 million residences, he said.
Although backhaul networks traditionally connected macrocells, 5G is expected to rely more heavily on a greater number of small cells. AT&T’s emphasis on connected buildings suggests some of those buildings will be small cell locations. But once in place, that fiber also can be used to support wireline broadband offerings.
Of the four major nationwide wireless carriers, only AT&T and Verizon have extensive fiber holdings. Like AT&T, Verizon has a nationwide long-haul fiber network and a LEC business – and although the company’s LEC business covers fewer states, the states it does serve are some of the nation’s most densely populated. Verizon also has announced plans to deploy fiber more aggressively to support 5G backhaul.
While 5G is top of mind with wireless carriers today and a huge topic in the media, Stephens cautioned that it will take time before the technology is commonplace. He noted, for example, that in some quarters, only 4% of AT&T’s wireless customer base upgraded their handset. If that refresh rate were to prevail, it would take 25 quarters for the company’s entire base to upgrade.
Stephens made his comments at the Deutsche Bank Media, Telecom and Business Services Conference in Palm Beach, Fla., which was also webcast.