YOU ARE AT:Network InfrastructureAT&T, Corning strike domestic fiber deal

AT&T, Corning strike domestic fiber deal

AT&T had to cut back on its fiber plans for 2021 due to supply chain issues

AT&T has lined up an expanded fiber deal with Corning. Based on the new deal, Corning is ramping up optical cable manufacturing in North Carolina, investing $150 million and initially adding 200 jobs.

The two companies said that the fiber deal encompasses both broadband expansion and acceleration of 5G deployments. Broadband expansion is a high priority across the federal government and the states, with billions of dollars in the mix as the pandemic has forced broadband into an even higher infrastructure priority to connect new customers or upgrade the speeds consumers are able to access. Combined with company-specific private investments in infrastructure projects that are moving forward, the demand for fiber is at record levels.

“We see expansion of our fiber infrastructure as central to the growth of our broadband reach, for consumers as well as business customers,” said Mo Katibeh, SVP of AT&T Network Infrastructure and Build. “By extending our collaboration with Corning, we’ll create American jobs through manufacturing investments, and also through the economic benefits that broadband brings to our communities.”

Securing fiber supply is an important part of AT&T’s network plans, which include extending fiber to millions of new locations over the next few years. AT&T had planned to build out fiber to 3 million locations this year, but in mid-August, Pascal Desroches, AT&T’s senior EVP and CFO, said at a financial conference that AT&T would only be able to build out fiber to about 2.5 million locations due to supply chain issues. He said during the event that AT&T is the largest fiber purchaser in the country, and generally felt good about its ability to purchase and deploy at scale. Even that leading position in the industry, however, hasn’t completely shielded AT&T from problems getting ahold of enough fiber. “Since the start of the third quarter, we are seeing dislocation across the board, including in fiber supply,” Desroches went on, adding, “We don’t think it’s going to impact us long term. But … if we’re feeling the pain of this, I can only imagine what others in the industry are experiencing.”

Multi-year fiber contracts with suppliers like Corning will likely enable larger network operators to maintain their supply. Smaller network operators, who typically don’t have such contracts and place fiber orders on a just-in-time basis, have expressed concern about their ability to procure that vital piece of networks. The flood of federal pandemic relief dollars focused on broadband expansion means that many companies are all trying to get fiber at the same time for build-outs with a limited window for funding and deployment—and if a major infrastructure package makes it through Congress, that will only ratchet up the pressure on the fiber market.

“The manufacturing capacity extends Corning’s market leadership as demand for network infrastructure continues to exceed industry forecasts,” Corning said in a release. “Government investments in broadband, now moving through the U.S. Congress and various states, are expected to further fuel the demand.”

“The need for ubiquitous connectivity has pushed demand on networks to record levels, and Corning is strategically investing to support network buildouts,” said Michael Bell, SVP and GM of Corning Optical Communications. “This capacity expansion in particular supports the growth plans of AT&T, who we’ve valued for more than three decades. We’re turning once again to the highly skilled local workforce in North Carolina to help us meet the demand. We deeply appreciate the support of local and state officials, particularly Governor Roy Cooper, Commerce Secretary Machelle Baker Sanders, and state lawmakers.”

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