AT&T Investing $14 billion in New Technology, As Long As It’s Not Copper

According to AT&T chairman and CEO Randall Stephenson, AT&T is going to invest $14B in its networks over the next three years. The investments are going to focus on wireless ($8B) and wireline ($6B), but in this case it isn’t copper wire that being invested in, but IP technologies over fiber. Is the POTS line entered a death spiral?

The opening paragraph of the article by Stacey Higginbotham sets the tone for what is coming for AT&T and the network:

AT&T is done with its copper telephone network and copper DSL business, according to its CEO and chairman Randall Stephenson, who spoke Wednesday at an analyst conference in New York City. The company believes that an all-IP network is the path to more profitable future.  Given the millions of subscribers that are dependent on the copper telephone lines and copper DSL products, AT&T has offered a $14 billion fringe benefit for those customers and the regulators who will likely balk at the idea of AT&T stopping its investment in copper.
Via: GigaOm

Copper is on its way out. Which, as Stacey said, rankle rural consumers who probably already feel like they are getting the short end of the stick from the technological world. As true as that may be, copper has had a great 170+ year run as a communications carrier, but we have to make the leap to the next thing—fiber and IP technologies—to be able to satisfy the ever-increasing desire for faster and more connected devices. This means that we’ll slowly be leaving copper wires (and POTS and DSL) behind.

Yeah, that’s going to cause issues since AT&T’s answer for areas where it won’t run fiber is 4G LTE (and its successors). Yeah can you imagine using a mobile data plan at home all the time? The costs could be nuts. That is unless AT&T changes how they market and sell high speed wireless services.

To do all this great connecting of people, AT&T is shooting for 300 million people being able to have 4G LTE (that’s 99% of the U.S.) by 2014 and 75% of customers in higher speed wireline by the end of 2015. On the plus site AT&T is saying that U-verse customers could be getting speed of 75  to 100 megabits per second as the network grows and newer technologies.

And why is AT&T doing all this? It has to. It has to do this to remain profitable. When the investments are all made and the benefits start coming in, 90% of its revenue will come from these high-value (and therefore high margin) services that should help boost AT&T’s bottom line.

See also: CNET