July 31, 2014 — We are in the middle of the second quarter earnings period, and today AGL Extra will cover the results of AT&T and Verizon Wireless.
Answering reports earlier this year of a spending freeze at the carrier, AT&T clarified that it will maintain the levels of capital expenditures forecast for 2014. “We’re still targeting capital spending in the $21 billion range even as we accelerated investment in the first half of the year,” John Stephens, AT&T CFO, said. AT&T’s capex was $6 billion in the second quarter and was $11.8 billion for the first half of the year.
Discussion concerning a freeze of the carrier’s spending was misinformed, according to Stephens. “With regard to the commentary about our spend in the first six months, it may have been more about the sharing amongst our spend,” he said.
Stephens said AT&T will complete its $300 million LTE build later this summer. “So most of the spending for that and much of the spending for the network densification has been already placed,” he said. “We just need to go out and utilize and put those assets into service, which we have to do.”
Other corporate work with regard to deploying fiber will moderate in the second half of the year as well.
Verizon Wireless Building out AWS Spectrum
With customer satisfaction on the line, Verizon Wireless spent more to increase network capacity and improve quality in its infrastructure build out in the first half of the year. During the second quarter, Verizon Wireless continued to add capacity to its LTE network, using Advanced Wireless Services (AWS) spectrum in the 1.7 GHz and 2.1 GHz range, covering more than 350 markets.
“The continued deployment of AWS and the addition of small cells, distributed antenna systems and in-building solutions will fortify our network advantage,” Verizon Wireless CFO Fran Shammo said. “Our consistent investment in wireless is the foundation of our success and drives our leadership and network quality, reliability, and the overall customer experience.”
Wireless capital spending in the second quarter was $2.8 billion (+21.7 percent) and through the first half totaled $5.3 billion (+23.25 percent), compared with 2013 capex spending of $2.3 billion and $4.3 billion, respectively.
“We are well ahead of what we spent through the first half of last year. We are investing to proactively stay ahead of demand,” Shammo said. “Our capital investment strategy is focused on adding capacity to the network to meet increasing 4G device adoption, which will drive higher customer usage.”
J. Sharpe Smith is the editor of AGL Link, AGL Small Cell Link and he contributes to AGL magazine.