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AT&T to Expand Fiber Service

By Evan Niu, CFA – Oct 6, 2016 at 11:43AM

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Ma Bell continues its gigabit roll out.

Image source: AT&T.

What happened?

AT&T (T 0.27%) has announced that it will be expanding its gigabit fiber network to 11 additional major metropolitan areas. The expansion is part of Ma Bell's broader goal of bringing AT&T Fiber to 67 metropolitan areas by year's end. The new markets that the company are adding include:

  • Florida: Gainesville and Panama City
  • Georgia: Columbus
  • Kentucky: Central Kentucky
  • Louisiana: Lafayette
  • Mississippi: Biloxi-Gulfport and Northeast Mississippi
  • North Carolina: Wilmington
  • Tennessee: Southeastern Tennessee and Knoxville
  • Texas: Corpus Christi

The longer-term plan is for AT&T Fiber to be available at over 12.5 million locations by mid-2019. That's compared to the current footprint of approximately 3 million locations today.

Does it matter?

The telecommunications giant first launched its gigabit fiber service in Austin, Texas, as a response to Alphabet's (GOOG 3.84%) (GOOGL 3.65%) entry into the area with Google Fiber. While the search giant's vision of high-speed internet is unavailable to the vast majority of U.S. consumers, Google Fiber has prompted progress within the wired broadband industry at a time when telecommunications companies would rather focus on wireless growth and mobile connectivity.

AT&T's total domestic broadband connections fell by 2% last quarter to 15.6 million, compared to 6% growth of domestic wireless subscribers to 131.8 million. It's not hard to see where the company's priorities lie. But wired broadband is still an important business for both AT&T and consumers, even if it's a mature sector. Anything that helps the U.S. catch up with the rest of the world in terms of internet speed and pricing is a good thing.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A and C shares). We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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