Update on AT&T and Copper Retirement
One of the quiet issues faced by incumbent local exchange carriers is how to retire their aging, and in today’s broadband market, inferior copper networks. If regulators put up hurdles, the value of the enterprise goes down, as the cost of maintaining the copper networks is high relative to the revenues generated on those networks. If the hurdles go down, the value of those enterprises go up and the incumbent (or a company considering acquiring the incumbent) can provide an entry into serving those geographic markets with more profitable networks. T has just announced that it intends to retire all its copper networks by 2029, though significantly, this doesn’t include those in California, whose Public Utility Commission (PUC) continues to raise regulatory roadblocks to discontinuing service over the copper network. Our New Street colleagues covered the financial aspects of the announcement last week. In this note, we provide links to our prior coverage on the relevant legal and policy issues and update our own analysis of T’s prospects considering recent filings at the FCC and changes in the political leadership overseeing these issues.AT&T is a holding company. Through its subsidiaries, the company is a provider of telecommunications, media and technology services. The company's Communications segment provides wireless and wireline telecom, video and broadband services. The company's WarnerMedia segment includes media and entertainment businesses that principally develop, produce and distribute feature films, television content, and other content globally; and operate digital media properties. The company's Latin America segment provides entertainment services in Latin America and wireless services in Mexico. The company's XANDR segment relies on using data from its customer relationships, to develop digital and video advertising that is relevant to consumers.
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