Fiber Is Foundational For AT&T’s Long-Term Success

I recently had the opportunity to spend two days with AT&T executives and its senior management team in New Orleans during the Men’s NCAA Final Four Tournament. AT&T is a sponsor of March Madness. I loved how the company ran a series of television spots involving spokesperson Lily interviewing her possible “substitutions” while she attended the big dance. My favorite is Matt Stafford waxing poetic about comparing the trade of an old phone for a new one – a hilarious poke at his road to success from the Detroit Lions to his recent Super Bowl win with the Los Angeles Rams! 

One of the days involved traveling around New Orleans, visiting a handful of sites where the telecommunications giant has deployed 5G, fiber and one of twenty depots that supports its Network Disaster Relief (NDR) team. Consequently, I would like to share my insights into what I found compelling during my four-stop tour with a handful of analysts and journalists, along with Scott Mair, that leads AT&T’s Engineering and Operations.

Will Townsend

5G and disaster recovery in the wild 

I have always loved the architectural beauty of the Big Easy, dating back to my visits as a college co-ed for Mardi Gras. Neighborhoods are picture-perfect, from the shotgun homes on Magazine Street to the stately residences that dot St Charles Avenue in the Garden District. So, it is no surprise that the permitting process to erect and install small cells is difficult in New Orleans. During the first stop of the city tour, we visited a neighborhood near the French Quarter to see the placement of 5G mmWave pole mounts. Surprisingly, the aesthetic incorporates a gas lamp fixture and does not look obtrusive. AT&T is also partnering with infrastructure providers such as Ericsson to deploy extremely compact radios installed on traffic lights with an industry-standard power connection. It is an effective combination of small cell deployment scenarios that should continue to streamline the operators’ 5G deployment process. 

Our second stop was a visit to AT&T’s NDR depot. It is no secret that New Orleans is prone to hurricane strikes, as evidenced by Katrina and, most recently, Ida. Mr. Mair takes preparedness seriously to ensure that customers are not without vital communications during natural disasters. To that end, AT&T has invested a staggering $650M in assets spread across twenty locations in the United States. The gear staged is undoubtedly on par with first responders – from amphibious vehicles and bunk trailers to SatCOLTs and Compact Rapid Deployable (CRD) units. The latter serve as vital communication links that leverage geosynchronous satellite connectivity for backhaul to support 4G LTE-based communication. AT&T is also exploring the use of burgeoning low earth orbit (LEO) satellite backhaul to support future 5G connectivity. However, all of the equipment in the world is useless without a game plan, and the AT&T team is ready, having documented many disaster recovery experiences in playbooks. Another factor in the operator’s favor in delivering communications resiliency is its vital role in building the FirstNet public safety communication network. The FirstNet mission is to deploy, operate, maintain, and improve the first high-speed, nationwide wireless broadband network for first responders and knit together what was historically disparate and siloed communication systems. From my perspective, AT&Ts NDR program and FirstNet capabilities give it an unrivaled ability to ensure ultra-high reliability in times of uncertainty, especially against its competitor Verizon whom I spent time in 2018 touring similar capabilities. 

Fiber rounds out the field trip 

AT&T has built a multi-billion-dollar business on broadband services, and fiber is a key to the carriers’ success in offering multi-gig speeds for its subscribers. Our third stop involved visiting an ongoing aerial fiber installation in Metairie, a suburb outside of the city limits. In fiber installations, permitting requirements often necessitate installing along telephone poles in the air versus in the ground. Aerial also provides a lightning-fast way to migrate existing cable customers to faster speeds to support video streaming and the explosion of home automation devices, including video cameras, smart thermostats, and DIY home security systems. However, Mr. Mair shared that over time, especially in areas such as Louisiana prone to high winds and inclement weather, in-ground deployment is favored due to the protection and resiliency provided. That makes sense because fiber provides the most robust backhaul support for 5G mobile network deployment over microwave and satellite. 

Our final stop on the New Orleans tour was at an AT&T central office (CO) location in the heart of downtown. COs play a critical role in facilitating switching to a telecommunications provider. I was blown away by the AT&T facility. The multi-story building houses switches, some dating back decades, massive generators, cooling towers, backup battery systems, and more to keep connectivity up the maximum amount of time. Interestingly, in the history of the building, which dates back to the 1920s, the building has never lost power. In fact, during Hurricane Katrina, when downtown New Orleans flooded and the public power grid failed, the AT&T CO never lost power. The highlight of the visit was seeing the underground area, the cable vault. There, I witnessed first-hand copper cables decades-old alongside new fiber cable runs. It provided a unique perspective on just how much cable runs under the streets of major metropolitan areas. 

Wrapping up

Spending time with AT&T proved eye-opening to see the infrastructure and resources behind its operational curtain. My biggest takeaway was how vital the operator’s fiber investment is to its overall converged connectivity portfolio. On the one hand, fiber is a massive driver for top-line revenue and ARPU for AT&T’s broadband business. It also provides critical backhaul capabilities to support a high-performing and resilient 5G network build. Other carriers may view fiber as a commodity – but from my perspective, it is foundational to AT&T’s long-term success. 

Disclosure: My firm, Moor Insights & Strategy, like all research and analyst firms, provides or has provided research, analysis, advising, and/or consulting to many high-tech companies in the industry, including AT&T and Verizon, cited, or related to this article. I do not hold any equity positions with any companies cited in this column.