AT&T Inc. continues to glow about its Project Lightspeed fiber-to-the-home initiative, this time telling a group of analysts at a New York conference Tuesday that the technology will force cable operators to pony up as much as $20 billion in plant upgrades to keep pace.
John Stankey, AT&T’s senior executive vice president and chief technology officer, told analysts at the daylong conference that Project Lightspeed is on track to expand from its San Antonio controlled deployment to include several new markets starting this summer. AT&T is on track to roll out the Lightspeed-powered “U-verse” video service in 20 markets by year’s end, Stankey added.
Based on the network build so far, AT&T is estimating that it will be able to offer big bandwidth to Lightspeed subscribers.
“We’ve got the speed we need to deliver IP-based [Internet protocol] services,” Stankey said. “We’ve seen speeds of 25 megabits per second and more at shorter loop lengths.”
Starting in late 2007, it can also pair bonding and compression technology to deliver even more bandwidth, Stankey added. In contrast, he said, cable operators will face a more constrained cable plant and limits to how much they can increase bandwidth using higher quadrature-amplitude-modulation transmission schemes.
“In my opinion, cable needs to respond to our Lightspeed offering through capital expenditures. At the low end, that could total $20 billion,” he told the analysts.
Lightspeed won’t come cheap for AT&T, however. The company expects to spend $1.4 billion this year, $1.7 billion in 2007 and $1.3 billion in 2008 for Lightspeed construction. That will expand Lightspeed from 3 million homes passed now to 9 million in 2007 and 18 million by 2008.
Replacing copper with fiber links leading to the customer premises could save the telco as much as $700 million in annual operational costs by 2011, Stankey said. It can also ramp up average revenue per user to at least $60 -- the average now for its Dish Network direct-broadcast satellite customers -- and it will be able to keep all of that revenue.
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