AT&T to Invest Billions in Wireless and Fiber

Femtocells; Wi-Fi; HSPA+; an almost doubling of its U-Verse footprint: AT&T Inc. said Tuesday that it plans to invest $17 billion to $18 billion this year despite the recession in these and other initiatives. And, it will add 3,000 new jobs.

And what, you might ask, is the economy-beating reason for keeping capex humming along in line with its pre-recession 2007 budget of $17.7 billion? The carrier says it’s still seeing increased demand for mobility, broadband and video – and especially for mobility, with a veritable explosion in demand expected once the economy turns around. It wants to capitalize on what growth areas there are (wireless and IP). And it wants to be ready for the future.

“We expect demand will only escalate when the larger economy rebounds, and AT&T’s continued strong network investment will help ensure that we’re fully ready to support the next wave of economic growth said Randall Stephenson, AT&T chairman and CEO, in a statement. “We recognize the continuing importance of investing in critical network infrastructure, which plays a key role in driving commerce, innovation and job growth.”

It’s wireless that will claim most of the limelight in terms of AT&T’s initiatives this year, with nods to fixed-to-mobile substitution and the increasing thirst for mobile Internet services.

Notably, AT&T will finally start to trial femtocells more widely with the goal of taking its 3G MicroCell service mainstream. These home base stations add carrier backhaul capacity by plugging into a broadband connection in the home to boost wireless signals to broadband levels for voice and data. Since the consumer is typically paying for the broadband in the first place, it’s an attractive way for a carrier to offload traffic and cost from the macro wireless network while encouraging broadband uptake.

Meanwhile it also plans to double its 3G network capacity by adding 850MHz spectrum to the mix, which is a frequency that provides better in-building coverage than the current network. It will also add 2,100 new cell sites and 20 new markets this year. And, in addition to its previously announced trials of 7.2mbps HSPA+, it said it plans to evolve to support speeds as high as 20mbps.

And along with all of this will be a continuing expansion of AT&T’s Wi-Fi footprint and infrastructure, building from the 20,000 hotspot footprint created in 2008 with the acquisition of Wayport.

On the wireline front, AT&T said it will nearly double its U-verse residential fiber footprint, hoping to pass 30 million homes in 2011, up from 17 million today. The carrier will continue to expand its DSL reach as well to cater to those looking for “affordable broadband.”

It all adds up to AT&T expecting to see data traffic on its core network growing more than 50 percent year-over-year, so its global IP backbone is getting a cash infusion too, including investment in subsea fiber-optic cables.

Meanwhile, AT&T Labs will receive R&D funding to work on LTE, 100-Gigabit backbone network technology and emerging IP applications.

All of this translates into 3,000 new jobs in the “growth areas:” those building, maintaining and enhancing the company’s networks, jobs for developing and delivering new IP applications and positions in global customer service. Those job additions will be offset, however, by previously announced job cuts in AT&T’s declining wireline organization.

So the takeaway: AT&T is interested in wireless data, residential fiber, upgrading core capacity and supporting future IP-based technologies. Consider it a glimpse into the future.

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