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Despite 1 Gbps Hype, AT&T Fixed-Line Spending Cut Again
by Karl Bode 10:31AM Tuesday Jun 03 2014
Jefferies analyst George Notter wrote a note to investors this week that AT&T "significantly reduced" the company's spending on their fixed-line network last month, something that has spooked AT&T hardware vendors like Ciena, Juniper and Adtran. If you've been reading our reports this shouldn't shock you; AT&T's been cutting fixed-line network investment each year for some time.

These cuts make it hard to take the company's claims of meaningful 1 Gbps fiber expansion seriously as there's simply no budget cordoned off for such a project ("Project VIP" funds are already in use on other efforts). While AT&T has the press believing they're deploying 1 Gbps to "up to 100 cities," AT&T's shrinking CAPEX tells a different story entirely.

Analysts believe most of AT&T's money and attention will continue to go toward wireless -- and now the acquisition of DirecTV.

At the same time AT&T was informing investors that they'd be cutting back fixed-line spending, the company noted that they've increased this year's revenue projections thanks to wireless (and specifically their Next early upgrade handset program). While wireless is AT&T's darling wireline remains AT&T's dud -- the company is going state by state trying to gut consumer protections that require they continue to provide DSL and POTS services.

So while wireless spending at AT&T may pick back up wireline investment won't be bouncing back anytime soon. Hanging up on DSL and POTS so the company can get the lion's share of their customers on to much more expensive wireless data plans is what AT&T means when they talk about the "IP transition" toward a better tomorrow.

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biotech

@66.249.113.x

Causes of human extinction

1. Too much radio frequencies being used = radiation over time (If Ma Bell were to push past the limits of the FCC.... I shudder to think what would happen.)
2. Because telecom providers don't care about the sick (but back then they did ;as claimed in their 1976 video when the Manhattan exchange was being out of service.... see New York Telephone on Wikipedia and AT&T Archives.)
3. Reluctance of telecom providers to care about the U.S (where they are situated at)
(ex. What's Randall Stephenson gonna buy with his 'measly' wage? Look at the CEO of Wally World for reference.)

Care to add on to this list?

atcotr

@65.60.144.x

Re: Causes of human extinction

said by biotech :

Too much radio frequencies being used = radiation over time (If Ma Bell were to push past the limits of the FCC.... I shudder to think what would happen.)

If you are not joking this is a sad level of misunderstanding. Cellular radio waves are many orders of magnitude weaker than the sun (watch out for that UV & green light). It cannot disrupt physiology by ionizing atoms. The only way someone could be hurt by non-ionizing radiation is through heating effects, i.e. if they were dumb enough to stand directly in front of a 40W base station antenna or stick their head into a running microwave oven. That's it. Sources of ionizing radiation includes the sun, your toilet, bananas, radon, airline trips, medical imaging, etc. The FCC limits are extreme overkill, mainly to pacify the public paranoid of new technology.

»www.cancer.org/cancer/cancercaus···e-towers
»www.osha.gov/SLTC/radiation_nonionizing/
»www.who.int/peh-emf/publications···aves/en/

chip89
Premium
join:2012-07-05
Independence, OH

Re: Causes of human extinction

Maybe We should't tell him that our body's are Radioactive...
biochemistry
Premium
join:2003-05-09
92361

Profit

Is AT&T losing money on wireline? Would like to see their profit numbers when excluding wireless.
--
isheavenforreal.com

fg8578

join:2009-04-26
Salem, OR

Re: Profit

said by biochemistry:

Is AT&T losing money on wireline? Would like to see their profit numbers when excluding wireless.

Not according to the segment results reported in their 2013 annual report (see PDF page 17). Wireline made $6.3B in 2013; wireless made $17.8B. Where would you put your money?
Skippy25

join:2000-09-13
Hazelwood, MO

Re: Profit

Both, being that they both make a crap load of cabbage and are going to be relevant for a long time.
biochemistry
Premium
join:2003-05-09
92361
Both. However, wireless is reaching a saturation point. Even grannies have cell phones now. Wireline, however, has a lot of room to grow. There are millions in AT&T territory who don't even have DSL access. Those who do can be force upgraded to Gigapower which costs consumers more money. Replacing copper with fiber will also save on maintenance costs.
--
isheavenforreal.com

fg8578

join:2009-04-26
Salem, OR

Re: Profit

said by biochemistry:

Both. However, wireless is reaching a saturation point. Even grannies have cell phones now. Wireline, however, has a lot of room to grow. There are millions in AT&T territory who don't even have DSL access. Those who do can be force upgraded to Gigapower which costs consumers more money. Replacing copper with fiber will also save on maintenance costs.

Wireless is nowhere near saturation.

The U.S. has 95 cellphones in use per 100 population (2012 numbers), whereas Finland has 172 per 100 population. The U.S. has a long way to go in terms of cell phone use.

Wireline POTS is a dying technology, although I agree wireline broadband has growth potential. The problem with telco broadband is that it must compete with cable broadband and DSL cannot support the speed or bandwidth of cable modem service.

I think wireless is the right investment for telcos.

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4

5 recommendations

Cost for fibre to the press release:

$0

MyTownUSA

@98.122.181.x

Re: Cost for fibre to the press release:

Internal docs show that HughsNet will be used to expand internet, after the acquisition is complete.

karpodiem
Hail to The Victors
Premium
join:2008-05-20
Detroit, MI

Re: Cost for fibre to the press release:

hahahahahahaha
etaadmin

join:2002-01-17
Dallas, TX
kudos:1
Whats the delay in bouncing a signal 22,000 miles up and 22,000 miles down? 0.24 seconds add or take a few milliseconds for equipment delays.

Gamers and VoIP users will love that.
LucasLee

join:2010-11-26
kudos:1

Re: Cost for fibre to the press release:

it's actually twice that, you need to go up, down, to the internet, then back up, then back down to the sat user.
etaadmin

join:2002-01-17
Dallas, TX
kudos:1

Re: Cost for fibre to the press release:

Correct, half a second delay that's even better

skinnyJM

join:2002-08-25
Fort Worth, TX
What acquisition??? of HughesNet??? I haven't seen anything stating at&t is acquiring HughesNet.
Bob61571

join:2008-08-08
Washington, IL
Reviews:
·MTCO Communicati..
·DIRECTV
·Frontier Communi..

1 edit

All the above leads any reasonable person to question

just how AT&T intends to expand its broadband network to handle
all the proposed new DirecTV customers in any bundle package.

A large number of DirecTV customers live outside AT&T's wireline network, so AT&T will have to spend substantial Capex to reach them. For those DirecTV customers inside AT&T's territory(believe me, there are quite a few of them, if you ever travel Chicago's El system), AT&T will have to spend Capex expanding both U-Verse and their old/neglected DSL areas(of which there are many!). I would suspect that the millions of DirecTV customers are broadband customers of dozens of ISPs in the US, but mostly cablecos and local telcos.

In my opinion, too many analysts of the AT&T/DirecTV proposal, completely fail to understand the magnitude of the broadband Capex expansion that AT&T will have to do, in order to really keep up with every other Cableco out there.

SlowFITL

join:2012-02-01
Mobile, AL

Maybe....

I think AT&T may be cutting back right now before increasing spending to build out the FTTP networks they are talking about. From everything I'm hearing the xFITL customers in the southeast will end up being FTTP in the next couple of years.
Zoder

join:2002-04-16
Miami, FL

Re: Maybe....

said by SlowFITL:

From everything I'm hearing the xFITL customers in the southeast will end up being FTTP in the next couple of years.

We've been hearing that story for like 6 years now. It's always a couple of years away.
Skippy25

join:2000-09-13
Hazelwood, MO
Hold your breath and let me know how that goes.
openbox9
Premium
join:2004-01-26
Germany
kudos:2
But AT&T isn't cutting back on CAPEX, at least according to its financial reports.
said by AT&T FY13 Report :

Virtually all of our capital expenditures are spent on our wireless and wireline networks, our U-verse services and support systems for our communications services. Capital expenditures, excluding interest during construction, increased $1,479 from 2012. Our Wireless segment represented 52% of our total spending and increased 3% in 2013. The Wireline segment, which includes U-verse services, represented 48% of the total capital expenditures and increased 13% in 2013, primarily reflecting our implementation of Project VIP.

We expect that our capital expenditures during 2014
will be in the $21,000 range. We expect 2014 to be our peak investment year for Project VIP and anticipate our Wireless and Wireline segments’ spend to be proportionally consistent to the previous year.

AT&T's Q1 at the end of March still showed AT&T spending $2.63B on wireline, up 34.7% YoY and relatively flat as a percentage of total CAPEX. I guess we'll see at the end of June whether Mr. Notter's guess that AT&T is going against its FY14 capital forecast is accurate or not.

NormanS
I gave her time to steal my mind away
Premium,MVM
join:2001-02-14
San Jose, CA
kudos:12
Reviews:
·SONIC.NET
·Pacific Bell - SBC
said by SlowFITL:

From everything I'm hearing the xFITL customers in the southeast will end up being FTTP in the next couple of years.

Sonic.net will bring FTTP to San José years before AT&T will convert xFITL to FTTP.
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

One Monopoly, United, with Profits insane.... at&t

Wireless is the future at&t wants for you. Incredibly expensive and controlled wireless.
WhatNow
Premium
join:2009-05-06
Charlotte, NC
Reviews:
·Time Warner Cable

Cutbacks

The cutbacks are to pay for DirecTV. They are also carrying on the tradition CEO Whitacre started always be in the process of buying a company so no one can tell what the numbers say when you compare year to year. The only thing that may be positive about this deal is picking up the Latin American customers but most likely they will lose them like they did Cingular wireless in Latin America.
ITGeeks

join:2014-04-20
Cleveland, OH

DSL and the States

The States can't force AT&T to offer DSL to start off with. It's a deregulated product and NEVER was governed by the states. They're free to shut it off at any time. They can afford to sue the state and would be happy to at any time. Many of the AT&T (former SBC/Ameritech) cities/states never had DSL to start off with until cable internet was brought in- at that point DSL was was available over night. So if the states required it- they would have had it long before and more areas would have access to it.