AT&T (T) plans to spend lavishly in 2010 to boost its business network infrastructure globally and expand services for small businesses in the US. The telecom major announced on April 6, 2010 that it will spend $1 billion in the current year on such initiatives.
This takes AT&T’s overall business-centric investments on network and services to more than $4 billion since the project’s inception in 2006. The carrier’s premium services are currently available to more than 3.5 million businesses.
The planned investment represents part of AT&T’s overall capital expenditure target for 2010 which has been earmarked in the range of $18-$19 billion. The carrier has lifted overall capital spending this year as it plans to expand its 3G network coverage across its existing cell sites and construct new base stations.
AT&T is investing heavily to tap opportunities in the wires data market. To increase network speeds, the company is currently conducting multiple technology upgrades. AT&T recently deployed the HSPA 7.2 technology based network that offers download speeds of up to 7.2 megabits per second (Mbps), double the existing throughput level. The operator targets deploying the 3G HSPA 7.2 network in 25 largest US cities by the end of 2010.
Moreover, the carrier will invest on expanding its Wi-Fi (wireless broadband) footprint and 4G network based on the Long-Term Evolution (LTE) standard, which it plans to begin testing later this year. AT&T is also broadening its portfolio of emerging wireless devices (including netbooks and electronic readers) for business customers.
AT&T has highlighted a number of strategic areas where it plans to split its projected $1 billion capital expenditure. A portion of the planned investment will be directed to improve web hosting, managed security and cloud computing services for small businesses. The company will expand data center facilities to support these initiatives.
Besides, the carrier plans to boost broadband network speeds to offer downlink speeds of 24 Mbps, covering more than 120 markets across its domestic footprint. AT&T will boost underwater cable capacity globally to improve data flow. Moreover, the company plans to augment the scale and content delivery of its enterprise mobile applications to address the burgeoning demand for mobile broadband-based services.
AT&T will also invest in creating applications for various sectors (including finance, manufacturing, retail, healthcare, education and government) and expand its offerings in emerging and converged applications. Additionally, the company will boost its global network footprint across Europe, Asia and Latin America and enhance services/applications to provide support for multinational enterprises.
AT&T is banking heavily on the ongoing rapid migration of network traffic from voice to data and video. The carrier is diversifying its business portfolio to keep pace with this paradigm shift as part of its strategy to survive in an increasingly competitive communications industry. The company’s aggressive investment plan is a reflection of these initiatives.
Read the full analyst report on “T”
Zacks Investment Research
