Telcos planning big cap-ex push in the second half

Major operators, including AT&T, Verizon Communications and Sprint Nextel, are planning to increase capital expenditures throughout the rest of this year, actions that likely will lift the equipment vendors that supply them.

AT&T plans nearly $18 billion in capital expenditures in 2009--including around $11.6 billion to improve the coverage, speed and capacity of its wireless and wireline broadband networks. However, the company only spent $7.4 billion in the first two quarters, leaving the bulk for the second half. The company is planning a major upgrade to its HSPA network to support peak speeds of 7.2 Mbps.

Verizon spent $17.2 billion in 2008, and said that excluding costs related to its acquisition of Alltel, its cap-ex spending in 2009 will be lower than in 2008, though it has not said by how much. The company spent $8.1 billion on cap-ex in the first half. Verizon Wireless' major investments likely will be directed toward its LTE network buildout, which it plans to commercially launch in 2010.

Sprint plans to spend around $1 billion of its planned $1.7 billion in cap-ex in the second half. Kurt Fawkes, Sprint's senior vice president of investor relations, recently said at an investor conference that the carrier's capital expenditures "were somewhat light" in the first two quarters.

"We'll step that up in the second half of the year," he said.

All of this could be a boon to vendors such as Alcatel-Lucent, Ericsson, Ciena and others. "Based on our conversations, there is a trend toward more cap-ex toward the end of the year, particularly here in North America," Tellabs CEO Robert Pullen recently told investors.

For more:
- see this Dow Jones Newswires article

Related Articles:
AT&T invests in HSPA upgrades ahead of LTE
AT&T to invest more than $17B in 2009, expand 3G network
Metric: Mobile capex will reach $163.5B in 2013

Suggested Articles

The C-Band Alliance (CBA) now says the U.S. could see billions of dollars going to the U.S. Treasury if its auction of C-band spectrum gets approved.

T-Mobile appears to be working to gain favor in NY, promising more jobs in new tax revenue from a second new customer experience center in the state.

Google announced it’s bringing RCS chat services to Android users in the U.S.