Lower costs for broadband technology and a more favorable regulatory climate could convince AT&T to hold onto its rural lines, according to a new research note from Fitch Ratings. The credit rating agency expects AT&T to announce its plans for its rural lines next month, and says that if AT&T does sell, potential buyers could include CenturyLink, Frontier and Windstream.
Last month AT&T CEO Randall Stephenson told investors that the company is thinking about holding on to its rural assets. Stephenson also said the company is looking at replacing fixed rural lines with an LTE broadband solution. Until now, larger carriers have focused their LTE buildouts on the higher-margin urban markets, while some regional carriers have started to bring next generation services to rural areas. But if AT&T decides to invest in its rural assets, customers served there might end up with better service than they would if a regional carrier buys AT&T’s access line business.
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LTE in rural areas often reiles on fixed wireless solutions. Fixed wireless services typically use a directional radio antenna on each end of the signal. Recently Ericsson announced a fixed wireless LTE solution for rural Australia, and here in the U.S. Verizon Wireless’s HomeFusion is a fixed residential LTE service.
Verizon has also had success with its LTE in Rural America program, which leases spectrum to smaller carriers so that they can launch LTE service. In addition to using Verizon’s spectrum, regional carriers can leverage some of the larger carrier’s human resources, including RF engineers and packet core engineers.