Impact of the Fiber Slowdown

While there was a huge amount of fiber built in the US in 2023, the largest providers almost universally cut back their plans during the year. There are a lot of reasons for the fiber construction slowdown. The high cost of borrowing put a crimp in a lot of service provider plans, and slowed new home startups, which are part of any plans for fiber expansion. Inflation played a role in the slowdown, too: it cost at least 20% more to build a fiber network by the end of 2023 than just a few years earlier. What are the consequences of a fiber construction slowdown? The biggest immediate impact is for fiber vendors, and seeing sales dip of millions of expected passings has to be extremely disappointing for the industry. Another immediate impact was on fiber contractors. A drop of over 3 million passings translates into a huge number of construction crews that didn’t get hired during the year. That goes a long way toward explaining why the forecasted shortage of technicians didn’t materialize as expected. Perhaps the biggest consequence is that 3 million fewer homes were passed by fiber. The big question, which nobody can likely answer, is if this slowdown is temporary and if the big internet service providers will eventually still reach their overall target number of fiber households. Or will the 2023 slowdown mean fewer homes will ever get fiber – at least from the giant providers?