The COVID hangover: US fiber providers slow down

According to the financial analysts at Evercore, US fiber operators are significantly scaling back their network buildout efforts. Indeed, the analysts warned that the pace of residential fiber construction activity in 2023 "will be consistent with 2022 levels, and perhaps even a little slower." That's a dramatic turnaround from just a few years ago, when analysts were cheering the "historic" fiber buildout plans of US operators like AT&T, Windstream, and Frontier Communications. And throughout 2022, those operators mostly made good on their promises. According to a survey backed by the Fiber Broadband Association, US fiber providers collectively built connections to a total of 7.9 million more homes in the US during 2022—"the highest annual deployment ever." But at the beginning of 2023, many of those same providers lowered their buildout targets for 2023. In total, the Evercore analysts noted that US fiber providers had planned to collectively build 9.4 million new locations during 2023, but now they expect that number to be around 6.5 million. The Evercore analysts pointed to a variety of factors—ranging from inflation to sluggish home sales—as conspiring to cool the US fiber industry during 2023. Indeed,  yet another challenge for fiber operators: Upgrading aging utility poles owned by electricity companies. But the most concerning element in Evercore's report is the firm's suggestion that fiber might not provide the return on investment that sparked the fiber frenzy of 2020 and 2021.