2016 Business Communications: Changing the Way We Work
A few weeks ago, I posted on uncertainties that persist about capital investment in the telecommunications sector.
AT&T did at least a little bit this week to change the perception that carriers aren’t willing to spend. Light Reading points out that during the last part of 2014 and “well into” 2015, the carrier’s capex declined. This was happening despite its gigabit broadband deployments.
A shift has occurred, however. The site reports that the carrier is changing its stingy ways:
In order to play effectively in the gigabit broadband market, and to earn the revenue benefits of its DirecTV acquisition, AT&T has to spend some money. That trend is evident both in AT&T’s late-year 2015 spending and in its outlook for 2016. Fourth quarter capex spending jumped to $6.8 billion over Q3 spending of $5.3 billion, and AT&T has already projected total capex spending for this year at roughly $22 billion, or about a billion dollars higher than its 2015 total.
The story says that AT&T will spend $22 billion this year, with $10 billion going to its business services. Much of that will be spent on network expansion. Bidness Etc. elaborated on the carrier’s plans. There will be significant additional investments in Mexico, including integration of 6,000 kilometers of fiber with its wireline business. Money will be spent on the Internet of Things (IoT), improving network connectivity and increasing its speed.
It seems that the investments may be necessary as the economy improves and other carriers – both in the U.S. and abroad – turn up the heat. This increased competition almost certainly will be tied to more investment:
Industry analysts expect that through increased capital expenditure, the company may be able to maintain its current network subscribers and report YoY growth by the year’s end. However, it might be too early to predict the results of the new investments as tough competition exists in the industry.
It pays to remember that even small signs from far away are important in a global economy. Globe Telecom – The Philippines’ second largest carrier – increased its capex for the year to $750 million U.S., which is $46 million more than 2015. The money will be spent on both its fixed and mobile infrastructures. In the autumn, Economic Times reported that an executive of Bharti Airtel, a major Indian carrier, said that it may spend $200 million to $400 million more than planned during the current fiscal year to support 3G and 4G cell sites.
Those are small signs indeed. They do, however, provide some hope that the investment picture is growing brighter.
Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at cweinsch@optonline.net and via twitter at @DailyMusicBrk.
