AT&T will not be able to build out as much fiber as it had planned to deploy this year due to supply chain issues, the carrier’s CFO said earlier this week.
Pascal Desroches, AT&T’s senior EVP and CFO, said at the Oppenheimer Technology, Internet & Communications Conference (transcript) that AT&T will only be able to build out about 2.5 million locations, rather than the 3 million it had expected to be able to reach with fiber.
The carrier has both a “preferred place in the supply chain” and committed pricing, and up through the second quarter, it hadn’t really seen any supply chain impacts, Desroches said. He said during the event that AT&T is the largest fiber purchaser in the country, and that in general, the company “[feels]really good about the ability to secure … fiber inventory and at attractive price points and the ability to execute and the build-out at scale, something that many others don’t have.”
Even that leading position in the industry, however, isn’t completely shielding AT&T from emerging supply chain issues.
“Ssince the start of the third quarter, we are seeing dislocation across the board, including in fiber supply,” he went on, adding, “We don’t think it’s going to impact us long term. But … if we’re feeling the pain of this, I can only imagine what others in the industry are experiencing.”
While large carriers can get committed supply and pricing from fiber producers, smaller operators often have to place their orders on an as-needed, just-in-time basis for individual projects as funding is available — so when there is a shortage, their ability to get fiber is likely to be more severely impacted than major telecom companies.
The news from AT&T comes just as even more money is about to be pumped into expanding broadband access: The U.S. Senate just passed a massive infrastructure bill that includes $65 billion for broadband connectivity-related programs, including more than $40 billion that will flow to the states to expand broadband infrastructure.
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