As expected, management at AT&T (NYSE:T) said on January 27 during its review of fiscal fourth quarter and full-year results that they expect to spend about $18 billion for capital expenditures (capex) in 2015. If the forecast holds, the total would represent slightly more than a $3 billion decline from the $21.4 billion spent in 2014.
The global Tier 1 service provider had signaled late last year that it expected to pare its capex this year. The company cited the near completion of its Project VIP effort – which includes connecting buildings to its fiber-optic network as well as expansion of its fiber-to-the-home (FTTH) infrastructure – as the reason for the capex pull back.
While most observers expect the majority of the capex to go toward wireless infrastructure improvements -- particularly considering the company's recent acquisitions of Iusacell and Nextel Mexico -- the fact that the company lost 51,000 wireline broadband subscribers in its recently concluded fourth quarter (excluding the Connecticut assets sold to Frontier) would indicate that high-speed broadband investments may continue to be emphasized as well. The company has had success with its high-speed U-verse Internet and video packages -- it gained 405,000 U-verse high speed Internet subscribers in the fourth quarter, for a total of 12.2 million, and added 73,000 U-verse TV subscribers in the quarter, for a total of nearly 6 million. It would seem that converting as many existing broadband customers to these higher-tier services would be a priority.
At year-end, U-verse TV penetration was about 22% and U-verse broadband penetration was about 21%.
However, the company has announced that it plans to hold off on its 1-Gbps U-verse with GigaPower FTTH market expansion efforts until the current Net Neutrality storm blows over. Yet it also faces expanded competition from Google Fiber.
Similarly to Verizon, AT&T reported a GAAP loss for the fourth quarter of loss of $0.77 per share due to "non-cash charges," versus $1.31 diluted EPS in the year-ago quarter. However, excluding "significant items," EPS was $0.55 up 3.8% from the year-ago non-GAAP EPS of $0.53. Quarterly revenues were $34.4 billion, also up 3.8 percent versus 4Q13 and up 4.5% when adjusting for the sale of the Connecticut assets.
For the full year, AT&T reported revenues of $132.4 billion, better than 2013's $128.8 billion. When excluding the divested Connecticut properties, revenues were up 3.1%, AT&T says.
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About the Author
Stephen Hardy
Editorial Director and Associate Publisher
Stephen Hardy has covered fiber optics for more than 15 years, and communications and technology for more than 30 years. He is responsible for establishing and executing Lightwave's editorial strategy across its digital magazine, website, newsletters, research and other information products. He has won multiple awards for his writing.
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