AT&T released a bold plan to invest $42.5 billion to expand its fiber-optic cable network. This is part of a $42.5 billion plan by the federal government to expand broadband by handing out Monday to internet companies to expand broadband. The company aims to deliver faster internet speeds to all its customers, including those without broadband. It’s striving to improve internet connections for more than 30 million current customers and businesses by the end of 2025.
Teaming up with BlackRock, Inc., the two companies are combining efforts to fund this expansion with the aid of government funding. Previously, AT&T and BlackRock have already invested $1.5 billion to expand services and upgrade speeds for its Gigapower venture.
AT&T plans to be the anchor tenant of this network and allow other companies access to provide internet services through Gigapower, which is finalizing plans to install fiber optic connections in Las Vegas, parts of Arizona, Alabama, Florida, and northeastern Pennsylvania.
In 2022, AT&T invested $24 billion towards its fiber optic and 5G networks and sources estimate it will spend at least that much in 2023. This year, however, most of its investments will be explicitly dedicated to fiber optic development.
AT&T has reported massive gains and overall net losses in recent quarters, so this business strategy of pumping billions could turn things around for the company financially as easily as it could put AT&T in over its head debt-wise.
AT&T reported in April of 2023 that the company has a net debt of $1,34.7 billion as of March 31st. The same month, however, AT&T reported revenues were up 1.4 percent year-over-year, totaling $30.14 billion. AT&T could be undertaking a profitable financial risk by expanding its reach and increasing speeds.
Other internet providers, such as Verizon and T-Mobile, are using broadband from the same cellular towers. If AT&T offers an alternative internet source via its expanding fiber-optic network, the company may have found the right niche to attract more customers while keeping its current clients happy with faster connections.