AT&T Pumps $14B USD Into Wired, Wireless Infrastructure Upgrades
November 7, 2012 4:43 PM
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AT&T looks to cover 300 million Americans with LTE, 1 million new business users with wired offerings
In its arms race with the nation's top carrier, wireless giant Verizon Communications, second-place AT&T Inc. (
) is digging deep into its pockets, looking to
pour $8B USD
into infrastructure upgrades.
beats Verizon in speed tests
in select markets and offers better fallback 3G speeds than Verizon, thanks to its HSPA+ network. However, it
But big things are ahead, promises AT&T, saying it will cover 300 million Americans with LTE by the end of 2014 -- about twice its current coverage.
AT&T Chairman and CEO Randall Stephenson cheers, "This is a major commitment to invest in 21st Century communications infrastructure for the United States and bring high-speed Internet connectivity — 4G LTE mobile and wireline IP broadband — to millions more Americans."
[Image Source: Reuters/Shannon Stapleton]
Also announced was a planned $6B USD investment over the next three years to beef up AT&T's wired internet, phone, and television offerings. The investment will allow AT&T to expand its wired internet offerings to an estimated 1 million new business customers, as well as many consumer users.
AT&T has been moving aggressively to expand the reach of
its Uverse service
, which competes with the likes Comcast Corp. (
). AT&T feels that it has a key advantage that cable-only providers don't, in that it can offer customers an additional bundled discount for being phone subscribers.
AT&T also announced that it was bumping its shareholder dividend. That decision was made, says Mr. Stephenson due to AT&T's expectation that despite the large capital expenditures, it anticipates continuing to turn tidy profits over the next few years.
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This article misses analysis
11/7/2012 10:29:00 PM
This article misses some important background. ATT isn't doing this because they are wonderful people who want to improve the world; they are doing it as desperate catchup.
It is worth looking at the cost of iPhone plans. Obviously things change depending on your exact situation, but for many common use cases (phone only, no family sharing, reasonable data usage per month) ATT's plans are vastly cheaper than VZWs, substantially cheaper than Sprint's, and comparable (once you include subsidy) to MVNO no-contract plans.
What does this tell us? ATT again aren't pricing this way because they like us; it tells us that ATT have ZERO pricing muscle, ZERO ability to force higher prices (unlike VZW). This situation exists because for years ATT have underinvested in their network, and its limitations are now widely known.
So yes, it's good that ATT are doing this; but it gets them to parity with VZW, it doesn't get them vastly ahead.
AT&T has been moving aggressively to expand the reach of its Uverse service, which competes with the likes Comcast Corp. (CMCSA). AT&T feels that it has a key advantage that cable-only providers don't, in that it can offer customers an additional bundled discount for being phone subscribers.
Uhh, yeah maybe in Bizarro land. When I signed up for U-Verse two years ago, I gave them my (ATT) cell info. Not only did I get no discount/bundling of any sort, I didn't even get a single bill or a single website login. In the two years since then, nothing has changed.
(And, FWIW in further tales of ATT incompetence, when I spoke to them two weeks ago, telling them I was going to switch ISPs unless they stopped insulting my intelligence by charging me a"rental" for their POS 2-wire box which I wouldn't accept it you paid me, they refused to give me a deal. So I switched. Then when I called to cancel, they were full of apologies and offers of a great deal.
WTF? Isn't it Sales 101 that you offer the customer the good deal BEFORE he buys from a competitor, not afterwards. Exactly what did they imagine was now going to happen? I was going to accept their better deal and now pay for two ISP subscriptions, the new one and the old U-Verse one?)
ATT pay a fortune to acquire customers, and then treat them so badly/incompetently that they can't retain them beyond the period of the initial contract. This does not look like it's a sustainably profitable business model.
RE: This article misses analysis
11/7/2012 11:35:45 PM
I worked marketing for TV/internet until recently
You get a $5 "bundling" discount off your wireless service if you bundle that with landline services.
Most ATT customers think it's more than that but that's it. 5 bucks.
Now bundling issue itself is whole nuther can of worms that screws most customers but that's getting a bit off topic here.
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