Verizon is investing largely in capital expenditure
Now we’ll take a look at Verizon’s (VZ) spending on capex (capital expenditure). In order to improve its network and acquire additional spectrum for future use, the mobile carrier has been investing largely in capex. Wall Street analysts expect Verizon’s spending on capex to reach ~$5.5 billion in 4Q17.
Verizon spent $11.3 billion on capex in the first nine months of 2017 compared to $11.4 billion in the first nine months of 2016. In 2017, the telecom company devoted much of its capex to network-related investments to maintain leadership in its markets.
Expected capex investments in 2017
Verizon’s management has guided for 2017 capex in the range of $16.8 billion–$17.5 billion. In comparison, AT&T (T) expects to spend nearly $22.0 billion on capex, whereas T-Mobile (TMUS) expects its cash capex to be in the range of $4.8 billion–$5.1 billion excluding capitalized interest.
Meanwhile, in its fiscal 2017 (year ended March 2018), Sprint (S) continues to forecast cash capex in the range of $3.5 billion–$4.0 billion, which excludes devices leased through indirect channels.
Furthermore, Verizon’s management has stated that it doesn’t expect this year’s planned 5G deployments to have any material impact on its capex in 2018. Verizon expects its 2018 capex program to be consistent with that of the past several years, which means that the company doesn’t expect deployments to erode its profits in 2018.