A joint venture was agreed upon by AT&T Inc. and a unit of BlackRock Inc., as both companies provide internet services beyond the traditional 21-state local phone territory. This venture targets 1.5 million customer locations initially.
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DALLAS, TEXAS - MARCH 13: A man walks with an umbrella outside of AT&T corporate headquarters on March 13, 2020 in Dallas, Texas. AT&T is allowing employees to work remotely from home if they have the ability to do so, as a safety measure due to COVID-19.
DALLAS, TEXAS - MARCH 13: A man walks with an umbrella outside of AT&T corporate headquarters on March 13, 2020 in Dallas, Texas. AT&T is allowing employees to work remotely from home if they have the ability to do so, as a safety measure due to COVID-19.
Gigapower Joint Venture
AT&T and Black Rock Alternative have both signed a definitive agreement as they form a joint venture called Gigapower, LLC. According to the released statement, this will provide internet service providers and other businesses in the United States with a commercial fiber network.
Gigapower LLC will also provide internet services beyond AT&T's traditional 21-state wireline service footprint that has fiber access technologies in many ways. Chief Executive Officer John Stankey stated that he is delighted that people are starting to recognize that connecting changes everything.
He added, "With this joint venture, more customers and communities outside of our traditional service areas will receive the social and economic benefits of the world's most durable and capable technology to access all the internet has to offer."
The company has also been looking for a partner that could help them invest billions of dollars in order for this expansion to continue. Last October, AT&T hired Morgan Stanley to work on bringing an infrastructure partner to the venture. As per previous reports, this could be valued at $10 billion to $15 billion.
However, the joint venture did not disclose any financial details on its statement but it is expected to go to regulatory approval and other closing conditions. Both parties declined to comment regarding the collaboration.
Targeted Areas
The joint venture is targeting 1.5 million customer locations initially. Based on Bloomberg's report, this is AT&T's biggest plan yet to attract new subscribers outside the local phone territory. Areas where it will be the first fiber to the provider are the ones that are being targeted by the company.
Broadband providers are also eyeing $100 billion in federal funds earmarked, as an effort to provide internet services in areas that have been difficult to reach or with low signals.
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AT&T's Other Plans
Aside from this, Reuters reported that a consumer subscribers forecast is also in the works through Gigapower in its operational results. They stated that any impact spent and free cash flow venture will be included in the report to provide for its quarterly earnings next month.
By 2025, AT&T also plans to expand its own fiber-optic network to 30 million homes and businesses. The company reported that it had already reached 18.5 million last quarter in September.
While AT&T prioritizes faster internet for everybody, other internet providers like Verizon Communications Inc. and T-Mobile US Inc. were both selling wireless home internet, as they focus to provide an alternative option for their subscribers that is far cheaper than their usual offerings.
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