uploads///Telecom Q Capital Expenditure

Analyzing Verizon’s Capex Estimate for 2Q17

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Jul. 26 2017, Updated 8:10 a.m. ET

Verizon is investing largely on capex

Now we’ll take a look at Verizon’s (VZ) future anticipated spending on capital expenditures, or capex. To enhance its network and purchase additional spectrum for future use, Verizon has been investing largely in capital expenditure. Wall Street anticipates Verizon’s spending on capex to rise ~8.1% YoY (year-over-year) to reach ~$4.2 billion in 2Q17.

Verizon’s management indicated earlier this year that its capex is likely to increase as the carrier continues to focus on 4G LTE densification ahead of the rollout of 5G technologies.

In 1Q17, Verizon spent $3.1 billion on capex, compared to just under $3.4 billion in 1Q16. In 1Q17, Verizon dedicated most of its capital spending on network-related to maintain leadership in its markets.

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Expected capex investments in 2017

For full-year 2017, Verizon’s management foresees capex to come in at $16.8 billion–$17.5 billion, whereas competitor AT&T (T) foresees to spend approximately $22 billion on capex. Meanwhile, T-Mobile (TMUS) foresees cash capex in the range of $4.8 billion–$5.1 billion, excluding capitalized interest. In fiscal 2017 (the year ended March 2018), Sprint (S) foresees its cash capex in the range of $3.5 billion–$4.0 billion, excluding the impact from leased devices sold through indirect channels.

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