AT&T Dominates Fiber-in-the-Loop Market with Impressive Contract Wins

Strategic Insights -

AT&T Network Systems has secured major contracts with Pacific Bell, Southern New England Telecommunications Corp., and Bell Atlantic, valued at billions of dollars, for its five-year network upgrade. However, questions have been raised about the company's ability to deliver on these large-scale projects and the exact nature of its fiber optics product. The company has yet to sign a contract for these deals, citing the complex and time-consuming process of integrating networks. As AT&T's biggest customer, Pacific Bell is on schedule with the delivery of AT&T's product, which will provide telephony over cable TV lines. Other vendors, such as Pirelli and Siecor, are also supplying fiber optic cable for the project.

Key Takeaways:

  • AT&T has secured major contracts with Pacific Bell, Southern New England Telecommunications Corp., and Bell Atlantic, valued at billions of dollars.
  • The company has yet to sign a contract for these deals, citing the complex and time-consuming process of integrating networks.
  • Pacific Bell is on schedule with the delivery of AT&T's product, which will provide telephony over cable TV lines.
  • Other vendors, such as Pirelli and Siecor, are supplying fiber optic cable for the project.
  • AT&T's solution for its fiber optics product is a "hybrid fiber-coax network concept" that is customized for each customer.
  • The company has reallocated research and development people to cope with the large number of orders, but the exact number of workers re-positioned is not known.
  • AT&T has identified qualified second sources for amplifiers, splitters, and test equipment, but will not disclose their names.
  • The Bell Atlantic deal will involve deploying tens of thousands of route miles of fiber and a substantial amount of business for AT&T.

Statistics:

  • AT&T's contracts with Pacific Bell, Southern New England Telecommunications Corp., and Bell Atlantic are valued at over $11 billion.
  • The Bell Atlantic deal will involve deploying tens of thousands of route miles of fiber.
  • General Instrument Corp. will contribute up to $1 billion worth of equipment to the Bell Atlantic network.
  • The deal is expected to involve deploying at least 1 million homes with VDT services by the end of next year.
  • DSC Communications stock dropped 15 percent in the wake of the announcement.

Sources:

  • AT&T
  • Pirelli
  • Siecor
  • Pacific Bell
  • Southern New England Telecommunications Corp.
  • Bell Atlantic
  • General Instrument Corp.
  • BroadBand Technologies
  • DSC Communications
  • Blanchard Hiatt (AT&T spokesman)
  • James Cullen (Bell Atlantic President)