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What Kind of Reach Will AT&T’s Gigabit Services Have?

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AT&T’s gigabit offerings

In the last part of the series, we learned about AT&T’s (T) 5G efforts. AT&T has been boosting its broadband proposition with AT&T GigaPower, a fiber-to-the-premises (or FTTP) service. GigaPower is capable of providing Internet speeds up to a maximum of one gbps (or gigabits per second), subject to conditions. According to the company, it has planned to expand the GigaPower service to reach more than 14 million locations. According to the telecom company, 5G development may have some ramifications on its fiber-based gigabit services in the future.

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According to William Lloyd Smith, the telecom company’s president of technology operations, “if you look five years in the future, the last – I’m not even going to say last mile, the last 1,000 feet may not be fiber, it maybe a 5G wireless solution, but we’ll still be providing a gigabit per second of connectivity. So, who cares whether this is actually a fiber facility connecting it or not.” He spoke about this at the recent Wells Fargo Convergence & Connectivity Symposium.

AT&T GigaPower

AT&T GigaPower is comparable to Verizon (VZ) Fios. These fiber-based services provide the telecom players the ability to compete effectively with cable players such as Charter Communications (CHTR) and Comcast (CMCSA).

According to the company, AT&T GigaPower is available at over 1.6 million locations in the top 25 metro markets. AT&T plans to expand the service to reach a minimum of 56 metro markets.

According to the Federal Communications Commission, the telecom company had committed to 12.5 million locations with FTTP service by 2019 during the approval process regarding the DIRECTV (DTV) acquisition. AT&T had acquired DIRECTV, the satellite TV provider, in July 2015.

For diversified exposure to some telecom companies in the US, you can consider investing in the SPDR S&P 500 ETF (SPY). The ETF had invested ~2.7% of its holdings in AT&T, Verizon, CenturyLink (CTL), Level 3 Communications (LVLT), and Frontier Communications (FTR) as of the end of May 2016.

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