From Carrier Consolidations to Continued Broadband Deployment in Rural Areas, Find Out What’s Ahead for the Industry
Bob Whitman
Published: November 21, 2024
The broadband industry is at a critical point, as federal funding drives rural buildouts and network upgrades, and rapid technological advancements like AI and automation drive the need for powerful, future-proofed networks. Carriers need to evolve and continue to focus on expanding access to all, as well as preparing for the demands of the future – and fiber will play a major role.
In 2024, we saw continued efforts to expand broadband to rural areas. In particular, the Broadband Equity, Access, and Deployment (BEAD) Program began awarding states funding based on each area’s needs. How this continues to play out will be a major storyline in the coming year.
There’s a lot of other exciting developments on the horizon in 2025, and I’m enthusiastic about our industry’s potential for growth and the role we’ll play in helping people and businesses thrive. Here what I’m seeing as the major trends to watch:
1. Fiber broadband business models are evolving
Over the past decade, broadband carriers of all sizes have deployed fiber broadband to both rural and suburban areas. But as coverage becomes ubiquitous, the market will reward companies that are able to find efficiencies of scale. We’re likely to see an uptick in mergers and acquisitions as private equity players look for an exit. One survey from AlixPartners found that 93% of network providers executives expect increased consolidation to happen soon. Recent activity from Verizon-Frontier, Bell Canada-Ziply, and several T-Mobile announcements support this concept.
Fiber optics is growing in several application spaces driven by the insatiable demand for bandwidth – according to one report the average monthly consumption has more than doubled over the past five years. Fiber is, to put it bluntly, a solid investment for service providers, meaning there will be more competition amongst them, especially in lucrative urban and suburban areas with a higher density of customers. Areas with only one fiber provider are targets for a second fiber provider to overbuild.
In tandem with consolidations, open-access networks are gaining traction in the U.S. – they’ve been more common in Europe up to this point. Under this model, multiple carriers use existing infrastructure to connect to a single network, offering subscribers more options and promoting competition between providers. In the right environment it can be a win-win, leading to less up-front capital investment per carrier and reduced risk as well as lower prices for end users. Like with consolidation, its growth will be primarily driven by the market. As providers consider expansions beyond their current service area, open access becomes a simpler and lower-cost option to grow their subscriber base.
2. Modernizing networks with fiber
For well over a century, copper wire infrastructure has been used to transfer data and voice. Copper cables in use today can be over 100 years old. They come with a more onerous infrastructure that can create higher maintenance costs and additional points of potential failure. As fiber increasingly becomes the preferred solution, carriers are ready to move away from copper and modernize networks.
When compared with other technologies, fiber offers higher bandwidth, more resiliency, and increased security, features that will continue to become more important as technology evolves.
Aside from service quality benefits, fiber also has a lower operating cost particularly when it comes to network maintenance. Copper requires a lot of upkeep, from maintaining batteries in the field to dealing with weather impacts. Fiber, on the other hand, is more reliable and resistant to external factors like weather and EMI, reducing the total cost of ownership over time and making it a more fruitful investment for providers.
In addition, optical fiber reduces energy consumption by up to 54% compared to copper-based networks.
And yet, replacing copper networks comes with challenges, including regulatory hurdles, which can vary from state to state, adding complexity. However, the bottom line is that fiber can do everything copper networks can and more. And I see the benefits of fiber outweighing any growing pains that come with replacement efforts.
3. BEAD funding will help close the last gaps of the digital divide
As service providers and governments work to connect these communities, the BEAD program is essential to providing access to reliable broadband internet to everyone. We see this as a once-in-a-generation opportunity, on par with rural electrification initiatives a hundred years ago.
This past year has been all about preparing for BEAD funding allocations and readying to make the best use of the funds. In 2025, BEAD funding will start to be allocated, and states will begin implementing their program plans. I believe the peak project work will come around 2027-28. While data shows that just over half of U.S. households have access to fiber broadband, I’m confident that we, as an industry, will be able to finish what we started and take advantage of this historical opportunity to connect the unconnected to fiber broadband across the country.
We assume approximately 90 percent of homes that receive network availability through BEAD funding will be passed by fiber. In rural areas where homes are more spread out, or clustered far from central municipal areas, plug and play solutions are a great option because these solutions don’t require splicing, the installation time and costs are reduced, and they don’t require the same level of expertise to deploy. As a result, service providers can bring down deployment costs by up to 30 percent, which is particularly helpful in remote areas where the business case is already challenged.
4. Continued buildouts of AI data centers will drive long haul fiber investments
As our industry works to bridge the digital divide, attention in the broadband space will also turn from fiber to the premise infrastructure to middle mile, and particularly, the long haul or “core network” interconnections between cities. The main driver here is the explosion of data center buildouts, but there are also needs for “campus” coverage at institutions like higher education, or small to medium-sized businesses with distributed infrastructure.
In optical communications we refer to “Shannon’s Limit,” as the upper limit of data rate transmission before signal degradation. As bandwidth demand skyrockets and more and more data is transmitted over optical fiber in the long-haul network, we are approaching Shannon’s Limit requiring an overbuild with optical fiber in the backbone network.
Network planning will need to incorporate not just the needs of today but future projected capacity. At Corning, we’re observing this trend with our customers now more than ever - an example of that being our recent agreement with Lumen where we’re reserving 10% of our fiber capacity for each of the next two years to interconnect AI-enabled data centers. As the AI boom matures from a training mode into more practical applications, demand will shift, bringing the compute power closer to users – and long-haul networks will need to be powerful and flexible enough to keep up.
To me, the year ahead is so critical because the focus will be on anticipating and preparing for future technologies to come. A future of fully digitalized homes, businesses and industries requiring a high-capacity, secure and reliable connection only fiber can provide. A future where everyone is connected, and no one is left behind when it comes to education and opportunity. And a future where strong, fiber-based core infrastructure supports transformative technologies like AI that are reshaping the world.
I’ll put it even more simply – fiber can truly satisfy the bandwidth requirements of today and tomorrow. For carriers, the year ahead will present tremendous opportunity as business models evolve, federal money continues to be available to help close the digital divide and core networks bring fiber-powered connectivity to regions transformed by AI data centers. At Corning, we stand ready to help carriers capitalize on this opportunity. We've invested more than $500 million in fiber and cable manufacturing since 2020 , more than doubling our ability to serve the U.S. cable market. Our future-ready solutions reduce complexity, making deployments faster and more cost-effective. We can meet this moment, together.
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