AT&T is spending large on capex
AT&T (T) has been investing largely in capex to improve its network. AT&T spent $4.2 billion on capex in the fourth quarter compared to $5.1 billion in the fourth quarter of 2017. The company continues to focus on integrated wireless and wireline business services.
AT&T is focusing on NFV (network function virtualization) and SDN (software-defined networking) technologies to transform its network. The telecommunications company is looking forward to achieving rapid service delivery along with the efficient utilization of its capital. AT&T also believes that the combination of its SDN- and NFV-based network solutions could reduce its network delivery costs as well as its selling, general, and administrative expenses. This methodology requires mobile operators to virtualize their networks rather than spend on dedicated fixed hardware. AT&T is planning to virtualize and control more than 75% of its network using this new methodology by the end of 2020.
Expected capex investments in 2019
AT&T’s management expects the company to see gross capex of ~$23 billion in 2019, excluding its FirstNet reimbursement of $1 billion. In comparison, competitor Verizon Communications (VZ) expects its 2019 capex to be between $17.0 billion and $18.0 billion, while T-Mobile (TMUS) expects its cash capex excluding capitalized interest to be in the range of $5.4 billion–$5.7 billion.