AT&T Responds to Capital Expenditure Criticisms

AT&T has responded to recent criticisms over its capital expenditures decrease since the launch of the iPhone.

Fake Steve recently noted that AT&T has spent 30% less on capital expenditures over the last eight quarters while wireless data revenues have increased by 80%.

Pummeled by negative press coverage, AT&T is now trying to defend itself against these numbers. AT&T contacted TiPb with the following statement:


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The metric you use in the phrase “While AT&T was content to increase data revenue while decreasing infrastructure investment all in the name of shareholder value” has been seen in a number of posts recently. However, it captures overall corporate capital expenditures for AT&T, which includes wireline investment as well as a number of items that are not directly linked to network investment (or performance) – including real estate, call centers and IT support. There is no way to calculate or even infer what our network investment is for any given period using those capex numbers. While we don’t break capex down to the level of network investment for competitive reasons, based on expectations for the full-year 2009, we anticipate that our wireless network investment will increase significantly compared with 2007 levels. And wireless capex increased significantly from 2007 to 2008.

Here’s a look at how we’re spending what’s expected to be between $17 and $18 billion in improvements in 2009 to our wireline and wireless networks, with billions on wireless:

* We are nearly doubling the wireless spectrum serving 3G customers in hundreds of markets across the country, using high-quality 850 MHz spectrum. This additional spectrum expands overall network capacity and improves in-building reception.
* We are adding about 2,000 new cell sites to our network in 2009, expanding service to new cities and improving coverage in other areas.
* We’re adding about 100,000 new backhaul connections, which add critical capacity between cell sites and the global IP backbone network.
* We’re enabling widespread access to our Wi-Fi network – the largest in the country with more than 20,000 hotspots in all 50 states – allowing customers to take advantage of the best available AT&T mobile broadband connection.
* We’re rolling out even faster 3G speeds with deployment of HSPA 7.2 technology and are preparing for field trials of next generation, LTE wireless networks next year, with deployment planning to begin in 2011. This schedule aligns with industry expectations for when a wide variety of compatible 4G wireless devices should be available.
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