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What Are AT&T’s Capital Expenditure Plans for 2017?

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AT&T is spending big on capex

AT&T (T) has been spending big on capital expenditure (or capex) in order to enhance its network and acquire additional spectrum for future use. In 1Q17, the company spent $6.0 billion on capex, compared to $4.7 billion in 1Q16. This rise in capex was mainly due to the company’s ongoing focus on integrated wireless and wireline business services.

During the recent Cowen Technology, Media and Telecom Conference on May 31, 2017, John Donovan, AT&T’s chief strategy officer, was asked about AT&T’s capex plans for 2017. Donovan stated that the company’s gross capex would likely exceed $22 billion in 2017 and for the next few years, partly because of its FirstNet network buildout. However, on a net basis, its capex should remain at normal levels due to the $6.5 billion in reimbursements that will come from FirstNet.

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Expected capex investments in 2017

AT&T expects to spend ~$22 billion on capex in 2017. In comparison, for 2017, rival Verizon (VZ) foresees capex of $16.8 billion–$17.5 billion, whereas T-Mobile (TMUS) expects its cash capex to be $4.8 billion–$5.1 billion, excluding capitalized interest.

Meanwhile, Sprint (S) expects its cash capex to come in at $3.5 billion–$4.0 billion in fiscal 2017—its year ended March 2018—excluding the impact of leased devices sold through indirect channels.

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