uploads///Telecom Q Capital Expenditure

AT&T Optimistic about SDN- and NFV-Based Network Solutions


Aug. 24 2018, Updated 9:01 a.m. ET

AT&T’s SDN benefits

AT&T (T) is focusing on SDN (software-defined networking) and NFV (network function virtualization) technologies to transform its network. The company is looking forward to achieving rapid service delivery along with efficient utilization of its capital. It believes that the combination of its SDN- and NFV-based network solutions could reduce network delivery costs as well as SG&A (selling, general, and administrative) expenses. This methodology requires mobile operators to virtualize their networks rather than spend money on dedicated fixed hardware.

At the end of 2017, ~55% of AT&T’s network functions were virtualized. It’s on track to meet or exceed its target to virtualize 75% of its network functions by the end of 2020.

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Expected capex investments in 2018

AT&T’s SDN- and NFV-based network solutions could eventually reduce its total capex. It’s expected to be ~$25 billion in 2018. It spent $21.6 billion on capex in 2017 and $22.4 billion in 2016.

In comparison, competitor Verizon (VZ) is expected to spend $17 billion–$17.8 billion on capex in 2018, whereas T-Mobile (TMUS) is expecting its cash capex to be $4.9 billion–$5.3 billion excluding capitalized interest. Sprint (S) expects its cash capex to be $5 billion–$6 billion for fiscal 2018 ending in March 2019, which excludes leased devices.


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