Carrier Updates: AT&T Ethernet Win, Verizon Outage

Dedicated internet access (DIA) is dominating carrier ethernet services in the United States.

Vertical Systems Group on Wednesday released its midyear rankings for U.S. Ethernet providers. The top six providers remain unchanged in order, and AT&T continues to lead the list.

Next came Lumen and Spectrum Enterprise, respectively.

VSG notes that DIA is currently the largest U.S.-based carrier ethernet services in terms of revenue and ports. It's also growing faster than any other service, according to the research firm.

An Entrant and an Exit

The leaderboard looks exactly the same as it did for the 2023 year-end leaderboard, save for one difference. Granite Telecommunications has entered the challenger tier (1-4% of market share).

The challenger list includes Cogent Communications, which officially exited the technology advisor channel last month. The company is not accepting orders from agents and will not pay commissions for renewals on existing accounts.

Telco Opex Drops

Research firm Omdia reported in August that adjusted operational expenditures in the global telecommunications market fell by 1%, to $1.29 trillion in 2023 (Omdia is owned by Channel Futures parent company, Informa).

On the other hand, revenue increased by 1% to $2 trillion, according to Omdia.

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Those opex reductions include content divestments like AT&T selling WarnerMedia, but significant cuts have also occurred in the areas of core connectivity. Omdia found that network infastructure opex dropped 6% in 2023, in large part due to fiber and 5G reducing leasing costs. This is one of the reasons incumbent local exchange carriers (ILECs) are seeking to retire their expensive-to-maintain legacy copper-based facilities as soon as possible.

Omdia futher notes that while telcos are shedding employees, their aggregate labor opex increased by $7 billion in 2023. This raises the question of how telcos will AI-based automation telcos to replace human jobs.

"Omdia has noticed an increase in mentions of AI throughout operator reporting but relatively few examples of exact cost-saving amounts attributed to AI," the report said. "For example, AT&T’s CEO, John Stankey, said generative AI has contributed to tangible improvements in cost savings, and the company notes that AI has contributed towards its $6 billion cost-saving goal, but it is not clear to what extent."

Verizon Wireless Outage

Verizon, ranked fourth on VSG's leaderboard, has received unwelcome attention this week for an outage affecting more than 100,000 mobile users. Verizon announced on Monday that it had restored services to affected users.

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The outage appeared unrelated to mass cell site outages that occurred in the Southeast due to Hurricane Helene. However, Verizon has not disclosed the cause of its outage.

Verizon's rival AT&T faced a cellular outage in February as well as a fiber-related Microsoft outage in September.