AT&T boosts 3G spend despite capex cutbacks
Published: 11 March, 2009
READ MORE: AT&T
"Mobility, broadband and video" are the watchwords of AT&T's capex plan for 2009, even though the total investment has been slashed by $3bn. It will invest two-thirds of its capital budget of $17bn-$18bn in enhancing 3G and wireline broadband networks to support new applications, better coverage and the quad play.
It will also add 3,000 jobs for this purpose, even after it cut 12,000 positions at the end of last year (mainly on the wireline side). Its capex total this year will be similar to that of 2007, when it spent $17.7bn, but 10-15% down on 2008, when it splashed out $20.3bn, including large sums on increasing 3G coverage and upgrading to HSPA. Spending on international networks will be about stable on 2008, at around $1bn. It is likely to be the biggest spender among the US carriers this year.
The main priority in the wireless business, which saw its revenues increase by 15% in 2008 to $49.3bn, will be to boost 3G coverage further. AT&T plans to expand W-CDMA/HSPA to 20 new markets, with the addition of 2,100 cell sites, and convert more areas to 850MHz for better indoor penetration. It now covers almost 350 markets with 3G. Most of the HSPA system will be upgraded to support 7.2Mbps download speeds, though in this respect, it remains well behind major operators elsewhere, which are already moving towards 14.4Mbps speeds and on to HSPA+, with Telstra in Australia at the front of the curve.
Other wireless activities will include the general roll-out of 3G MicroCell femtocells, to enhance in-building coverage further and support new converged applications; and the expansion of the 20,000-strong network of Wi-Fi hotspots, which AT&T boosted last year with the acquisition of Wayport. The operator's statement says data traffic on its networks is increasing at 50% a year. "We expect demand will only escalate when the larger economy rebounds," he says. "AT&T's continued strong network investment will help ensure that we're fully ready to support the next wave of economic growth."
On the wireline side, AT&T will prioritize the expansion of its IP/MPLS backbone networks and of the footprint for its U-verse broadband and IPTV service, which should reach 30m homes by 2011, up from 17m today.
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