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What Is AT&T’s Capex Estimate for 3Q17?

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AT&T is investing heavily in capex

Let’s analyze AT&T’s (T) anticipated spending on capex (or capital expenditures). AT&T has been spending significantly on capex in order to enhance its network and procure additional spectrum for future use. Wall Street analysts forecast AT&T’s spending on capex to fall ~3.7% year-over-year (or YoY) to reach ~$5.6 billion in 3Q17.

In 2Q17, AT&T spent $5.2 billion on capex as compared to $5.5 billion in 2Q16, as the telecom company continues to focus on integrated wireless and wireline business services.

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Expected capex investments in 2017

AT&T’s management projects it will spend nearly $22.0 billion on capex in the full-year 2017 as compared to $22.9 billion in 2016. In comparison, Verizon (VZ) anticipates capital expenditures for the full-year 2017 to be in the range of $16.8 billion and $17.5 billion, respectively, whereas T-Mobile (TMUS) anticipates cash capex to come in the $4.8 billion to $5.1 billion range excluding capitalized interest. Meanwhile, Sprint (S) forecasts its cash capex in fiscal 2017 to be in the range of $3.5 billion–$4.0 billion, which excludes the impact from leased devices sold through indirect channels.

Additionally, AT&T’s management stated that the timing of FirstNet expenditures and reimbursements could cause fiscal 2017 FCF (or free cash flow) to come in at the low end of its projected $18.0 billion range.

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