December 5, 2006
Line Losses
US phone companies have been losing access lines to cable rivals (and to a lesser extent, VoIP companies like Vonage) for the past few years. But could the trend be slowing?
Richard Lindner, AT&T’s chief financial officer, says he believes the access line losses have reached a plateau. "Cable companies tend to make big penetration gains in the first year and then tail off," he told his audience at a Credit Suisse Media and Telecoms conference in New York.
"Our expectation is that 2007 will not see an increase in access line losses."
AT&T, which faces telephony competition from Cox, Time Warner and most recently Comcast across much of its geographic footprint, is hitting back by deploying IPTV (Internet Protocol TV) service dubbed U-Verse.
AT&T chose to invest in FTTN (Fibre to the Node) technology that uses copper for the final connection to the home rather than more expensive FTTH (Fibre to the Home) being deployed by rival Verizon Communications.
Nevertheless AT&T says it remains confident that it will be able to meet demand for faster broadband data and advanced video services.
"Our view at this point is that we’re not going to have go ‘fiber to the home,’ "said Lindner. "We are pleased with the bandwidth that we are seeing over copper. On average, at this point, we’re producing about 25Mbps (megabits per second), but in many, many locations, we are producing substantially more than that,” he said.
