CenturyLink: FTTP deployment costs range from $500-800 per home

CenturyLink said that by using a series of new technologies like micro trenching and existing utility poles it can keep fiber to the premises (FTTP) installation costs in check.

Tony Davis, VP of investor relations, told investors during Oppenheimer’s 19th annual technology, internet and communications conference, that the telco is constantly measuring costs as it pursues new FTTP builds.

“When you think about our cost to deploy GPON today, we said that to get the fiber to the premises enabled it has been running from $500 to $800,” Davis said. “We said first we’re going after aerial plant in most of the areas where we can do aerial.”

Similar to AT&T and Frontier, CenturyLink has been looking at ways to leverage micro trenching. Through a partnership with the University of Louisiana, the telco has begun trialing a micro trenching method in Seattle and Minnesota.

The service provider co-developed the micro trenching method with the University where it cuts a shallower-than-usual trench in the edge of a roadbed, deploying conduit and using a polymer seal over the top of it. This method would reduce fiber installation costs.

“As others have done we have looked at micro trenching for buried cable to see if we could improve the costs to deploy in a buried case,” Davis said. “We continue to work on that and look at ways to do that more efficiently.”

It costs an additional $500 to $600 to install a fiber drop and optical network terminal (ONT) inside a home or apartment to provide connections to the consumer. Perhaps not surprisingly, the cost to deploy vectoring over its existing copper network is far lower.

Davis said that by using vectoring on bonded copper pairs it’s “about $160 a household to enable service so it’s a much less expensive as an overlay.”

Broadband overall continues to be a priority for CenturyLink. Despite losing 65,000 broadband subscribers in the second quarter, CenturyLink continued to make progress with its higher speed offerings, particularly 40 Mbps. 

Over 8.4 million addressable households and businesses were able to get access 40 Mbps or higher speeds, including 1.2 million GPON-enabled addressable units. Fellow ILEC Cincinnati Bell is seeing a similar cost to install its Fioptics FTTP service per home.

Leigh Fox, CFO of Cincinnati Bell, told investors during its second quarter earnings call that it is seeing similar costs, but expects them to drop over time.

“I think today we run about $700 and change, and I would say, the way I view it is it stays around that for now, and then drops down into $600 range over time,” Fox said. “I think that's probably a little conservative, but that's sort of where my head's at.”

Cincinnati Bell has set an ambitious goal to pass 80,000 homes with fiber by the end of the year. As of the end of the second quarter, Cincinnati Bell passed 47,000 new addresses with Fioptics.

Fox said that what’s helping Cincinnati Bell achieve cost savings in building out fiber is that they are addressing homes where they have already have installed service before.

“As we build we're seeing a slight increase in the cost per build, but it's not as much as we had anticipated which means we are getting more efficient and we know where these efficiencies are coming from,” Fox said. “The same as happening on the install where we are seeing variations, but the things that we look at from an efficiency standpoint are you're beginning to hit homes where we've installed service before. So there's less cost and less time involved. We're seeing efficiencies being gained in reverse logistics, the reuse of assets.”

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