A big slice of AT&T's $1 billion tax windfall will fund the service provider's insatiable hunger for fiber, CEO John Donovan told an audience of analysts this week.
The $1 billion reaped through the massive corporate tax cut bolstered AT&T's $25 billion capex budget already allotted for investment in network quality, capacity and development, Donovan said during the Morgan Stanley Technology, Media & Telecom Conference in San Francisco on Tuesday.
"The fiber footprint, we expect to get to another 3 million homes this year," he said. "When we talked about raising our capital budget $1 billion this year, a lot of that will go to our fiber footprint. And then when you get out of capacity and footprint, you get through wireless and wired, you look at things like development budgets."
In addition to serving new residential customers, AT&T's fiber investment will support the service provider's ongoing 5G initiatives, Donovan said. From leveraging its award to provide nationwide FirstNet services by adding on residential and commercial products to generating new offerings from 5G's low-latency capabilities, AT&T expects its infrastructure deployments in everything from fiber to Gfast to wireless loop to start paying off this year, he said. (See AT&T Goes Full Speed Ahead on Fiber .)
"The 5G network is a game-changer and it's a game-changer in subtle ways. The network is going to be fast and economical and is going to have low latency," he said. "Its low latency is its unique characteristic. It'll change the game... as far as what is done in a network versus what is done locally. That real-time network affords you a lot of opportunities. Personally, I think it's the most exciting technology that's unfolded in my career."
Soft spot for SDN
Part of AT&T's capex plan also focuses on further fine-tuning software-defined networks for internal and enterprise use and as another foundation for 5G. While many were initially skeptical of this initiative, Donovan showed almost paternal pride in the program's success -- especially that 60% of international wireless carriers have committed to adopt AT&T's SDN platform, he said.
"[SDN has] always been kind of my favorite thing because before this job, that's what I used to do," Donovan recalled. "The software-defined networking has been extremely effective. I know in the beginning there was a lot of skepticism, saying 'can you do for networking what iOS and Android did for mobile phones,' which is to build an operating system that allows you to be very creative on top and very low-cost on the bottom with hardware and I think a lot of folks had on the too-hard-to-do list."
— Alison Diana, Editor, UBB2020. Follow us on Twitter @UBB2020 or @alisoncdiana.