Can the Big Telecom Companies Turn the Corner with Fiber?

I was asked an interesting question recently: will fiber help the big telecom companies turn the corner to success? It’s a good question when looking at telcos like Frontier, Windstream, Lumen, and any others who are late to the game for converting copper to fiber. There are a lot of factors that will come into play, so the answer is likely to be different by company. On the plus side is a general consensus by many households that fiber is the best technology. There is a sizable percentage of homes in any market that will move to fiber given a chance. I’m sure this differs by community, but my experience is that 20 to 30 percent of homes will almost automatically switch to fiber, and that percentage is likely growing. It seems that all of the talk about broadband over the last few years has sold the idea that fiber is a superior technology. We know telcos are hoping this perception is true, but any perceived superiority of fiber is going to be relatively short-lived as cable companies upgrade networks to have faster upload speeds. Ultimately, there is no guaranteed path to success for a telco that finally gets around to converting to fiber. The incremental new revenues from the conversion may not be high enough to make the math work. The big telcos will be battling a negative public perception of them as quality and reliable internet service providers. They might be successful just because of the advantages that fiber has over cable company copper networks – but those advantages might not be enough to make a bottom-line difference.

[Doug Dawson is President of CCG Consulting.]