Monday, March 9, 2009

AT&T Confirms 2009 CAPEX of $17-18 Billion

Saying that the demand for connectivity remains strong despite the economic climate, AT&T confirmed plans to invest $17 billion to $18 billion in 2009, in line with its 2007 capital expenditures of $17.7 billion and expected to exceed the planned investment of any other U.S. telecom company.

Approximately two-thirds of AT&T's 2009 investment will extend and enhance the company's wireless and wired broadband networks to provide more coverage, speed and capacity. To support increased customer demand in mobility, broadband and video, the company plans to add nearly 3,000 jobs in 2009. However, as previously announced, the company expects to reduce jobs in other areas -- primarily wireline -- due to economic pressures, a more streamlined organizational structure and continued shift among residential customers from wired voice services to wireless and broadband.

"Demand for broadband continues to grow as new applications emerge and customers embrace them, leading to data traffic on our network growing more than 50 percent year over year on average," said Randall Stephenson, AT&T chairman and chief executive officer. "We expect demand will only escalate when the larger economy rebounds, and AT&T's continued strong network investment will help ensure that we're fully ready to support the next wave of economic growth. We recognize the continuing importance of investing in critical network infrastructure, which plays a key role in driving commerce, innovation and job growth."

AT&T's broadband investment priorities include multiple projects designed to enhance its 3G network. With 3G services now available in nearly 350 U.S. metropolitan areas, the company will focus in 2009 on enhancing coverage and reliability across this footprint, including the planned addition of more than 2,100 new cell sites across the country. Additionally, AT&T will expand 3G service to 20 new markets this year.

Highlights of other planned initiatives include:

  • Expanding its 3G network, which is now available in nearly 350 U.S. metropolitan areas. AT&T will add more than 2,100 new cell sites across the country. Additionally, AT&T will expand 3G service to 20 new markets this year.

  • Nearly doubling the total network capacity in most markets via additional spectrum at 850 MHz, a frequency that can offer improvements to in-building coverage.

  • Leveraging the capabilities of AT&T's GSM/HSPA network to further increase 3G speeds, starting with trials of 7.2 Mbps peak downlink speeds and evolving to speeds as high as 20 Mbps.

  • Customer trials leading toward general availability of AT&T 3G MicroCell offerings, which utilize femtocells and home broadband connections to enhance in-building wireless coverage.

  • Continuing expansion of AT&T's leading Wi-Fi footprint and infrastructure, building from the 20,000 hotspot footprint created in 2008 with the acquisition of Wayport.

  • Continued expansion of its wired broadband access and IP/MPLS backbone networks.

  • Expansion of the U-verse footprint, with current plans calling for the network to pass 30 million living units in 2011, up from 17 million today.

  • AT&T will also continue to invest in its global IP backbone network, which carries wireless and wired broadband traffic from AT&T customers and others around the globe. In 2008, the company completed the deployment of 40 Gbps backbone technology. This year, the company will invest in multiple new subsea fiber-optic cables to maximize capacity and reliability of backbone connections, and will continue to expand the global reach of access solutions for enterprise customers.

  • Te creation of nearly 3,000 new jobs in growth areas. These new jobs will bolster AT&T organizations responsible for building, maintaining and enhancing the company's wireless and wired networks, developing and delivering new applications that take advantage of IP connectivity and maintaining customer service capabilities crossing the AT&T portfolio of services and applications.

  • Continued investment in AT&T Labs, including research in 4G Long-Term Evolution technology; 100 Gigabit backbone network technology; and development of a range of emerging IP applications.
http://www.att.comIn February, AT&T announced plans to invest approximately $1 billion in 2009 to continue building out its global network. AT&T said its investment is focused on the network infrastructure, services and support for companies requiring "anytime, anywhere" access to the systems, suppliers, customers and employees needed to successfully run their businesses.

Specifically, AT&T said it is capitalizing on the ongoing shift in network traffic from voice to data and video-- and more importantly to IP-based data and video-- as customers migrate from legacy data networks to MPLS-based Virtual Private Networks (VPNs) and managed applications.

Some key points of the 2009 investment plan:

Network-Based Services and Applications:

  • Enhancements and additions to AT&T's virtual private network portfolio, wide area network (WAN), telepresence, unified communications, hosting, applications performance, and digital media solutions, all of which helped to drive double-digit IP data growth as reported in AT&T's recent fourth quarter earnings.

  • AT&T Telepresence service availability in China in collaboration with local service providers, to extend AT&T's ability to connect different companies using the service.

  • Managed IP telephony & LAN services in China, India, Philippines, Thailand, Malaysia and Mexico.

  • In the hosting and utility computing space, AT&T is increasing data center hosting capacity in Atlanta, Annapolis,
    the New York/New Jersey metro area, Hong Kong, Tokyo and the United Kingdom; scaling the AT&T Synaptic Hosting platform in Singapore, Amsterdam and three sites within the United States; increasing the level of automation for delivering AT&T Synaptic Hosting services; expanding application services in the super IDCs by enabling more
    on-net managed applications, such as Oracle and SAP; and supporting more virtualized customer applications by expanding
    managed hosting services onto the client premises.

  • Extending the AT&T Intelligent Content Distribution Service reach into Mexico, and enhancing service in high growth areas such as Brazil, India and China. Plans also call for expansion of capacity in existing service countries and jurisdictions in Europe, Japan, Hong Kong, China and Taiwan. This expansion will cover services such as Flash, Windows Media Format, Move Networks and Silverlight that support large file downloads and video formats. AT&T is also expanding its SSL security capabilities.

Mobility Services and Applications:

  • Accelerated deployment of mobile conferencing solutions, portal capabilities and business mobility applications for companies of all sizes in vertical industries like finance, manufacturing, retail, healthcare, education and government. AT&T is continuing its investment in platforms to support mobility application deployment including: location based services; the AT&T Mobile Enterprise Applications platform; the Enterprise On Demand (EOD) service delivery platform which lets customers self manage large wireless data deployments of specialized vertical devices; and the External Access Gateway, which is a platform that lets third parties use the AT&T network for network transactions such as network location based services queries.

  • Global management of multiple mobile operator contracts to support the wireless needs of multinational companies (i.e. order processing, invoicing).

  • Device protection and control and other security capabilities to ensure that companies can safely access applications and work tasks anytime, from any enabled device.

  • Fixed-mobile convergence capabilities, building on AT&T's Mobile
    Extension service announced earlier this year.

IBM Network Integration:

AT&T is working on continued integration of IBM's global network operations which were acquired through the 2007 expanded agreement between the companies. Through its agreement with IBM, AT&T last year added on-the-ground support and networking expertise in 48 countries worldwide, and closed more than a dozen new contracts.

Continued Global Network Rollout in 2009

  • Deploying new subsea fiber optic cable capacity to Alaska, Australia, Asia Pac, India, Puerto Rico and the Caribbean, and on trans-Atlantic routes to Europe. Today, AT&T has ownership interests in 83 subsea cable systems, covering 488,000 route miles. In total AT&T's network has over 888,000 route miles of fiber.

  • VPN services will be extended in an additional 18 countries, giving VPN access in a total of 149 countries worldwide.

  • VPN Ethernet access will be available in 38 countries increase from 34 today.

  • VPN DSL access will be available in 44 countries increased from 38 today.

  • VPLS access will be available in 31 countries increased from 15 today. AT&T's OPT-E-WAN Ethernet Virtual Private LAN is the only certified, fully unified global carrier Ethernet service based on a seamless MPLS/VPLS infrastructure available with coverage in the US and worldwide.

  • IPv6 deployment - to meet the global requirements of governments and companies, AT&T is deploying a multi-year plan to deliver a full complement of IPv6 networking services that will also preserve customers' existing IPv4 investment
  • .

  • Continued rollout of new network capabilities, including AT&T Wavelength Private Line and enhanced AT&T Ultravailable Network Services;

  • AT&T plans to continue to grow global backbone capacity by introducing new and faster 10 Gbps edge equipment; increasing backbone bandwidth; and adding more Cisco CRS1 routers on key routes.

  • Expanding network- and premises-based firewall capabilities, as
    well as the AT&T Internet Protect suite of capabilities including My Internet Protect, Private Intranet Protect, and DDoS Defense to the Asia-Pacific region.

See also