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Supply Shortage Causes AT&T's Fiber Internet Expansion to Hit a Snag

The global 'chip crunch' is now impacting AT&T's fiber-to-the-home expansion plans.

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Photo: Photo by Tim Boyle/Getty Images (Getty Images)

The global chip crunch is already affecting multiple sectors including PCs, consoles, and the automotive industry, and now it’s wreaking havoc on AT&T’s fiber-to-the-home plans after the company announced a slowdown in fiber installations affecting around 500,000 homes.

Originally, AT&T had planned to roll out new fiber-to-the-home installations to around 3 million new customers in 2021. However, during a recent virtual conference detailed by Ars Technica, AT&T vice president and CFO Pascal Desroches recently announced AT&T is now lowering its forecast due to supply issues.

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“We’re probably going to come in a little bit light, probably around 2.5 [million],” said Desroches. “Up through the second quarter, we hadn’t really experienced any impact from the supply-chain disruptions that are happening across the industry. But since the start of the third quarter, we are seeing dislocation across the board including in fiber supply.”

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Throughout the last 12 to 18 months, the global semiconductor shortage has had the biggest impact on the production of things like CPUs, GPUs, and other chips, but now, it seems the chip crunch is beginning to impact the availability of base components like fiber optic cable as well, despite Desroche claiming that AT&T is the U.S.’s largest fiber purchaser.

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And when huge corps like AT&T are having trouble sourcing components, things become even tougher for smaller ISPs, with Ars Technica also reporting that some smaller ISPs are facing minimum delays of three to four weeks (and up to 12 weeks in some cases) when trying to purchase the equipment needed to expand their networks.

Thankfully, it seems AT&T’s fiber shortage may not be quite as dire compared to semiconductor availability, as AT&T announced in a recent press release that it plans to ramp up its fiber deployment in order to bring fiber broadband to 30 million homes by the end of 2025. AT&T says:

“In working closely with the broader fiber ecosystem to address this near-term dislocation, AT&T has better line of sight in its ability to ramp its fiber deployment activities in the coming quarters and is confident it will achieve the company’s target of 30 million customer locations passed by the end of 2025.”

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Currently, AT&T has been able to roll out fiber broadband to around 15 million homes. However, even if AT&T hits its goal of expanding fiber-to-the-home to 30 million customers by 2025, that will still leave around 20 million other AT&T internet customers relying on older and slower copper lines.

But with the Biden administration looking to boost broadband speeds and broadband access across the country, the availability of faster fiber internet will only become more important, both for the U.S. and AT&T’s bottom line.