Telecom Lead India: AT&T may lower telecom Capex in 2012 from the earlier expected $20 billion to the low end of the $19 to $20 billion range.
Announcing the third quarter financial result on Wednesday, AT&T said: “Capital expenditures for the year are expected to come in at the low end of the $19 to $20 billion range while still meeting network build targets. The company’s LTE deployment is ahead of schedule, already covering more than 135 million POPs.”
Late January, AT&T had said it expects 2012 capital expenditures to be about $20 billion.
On Wednesday, AT&T said its capital expenditures totaled $4.9 billion during the third quarter.
Credit Suisse earlier estimated that AT&T and Verizon together account for approximately 12 percent—or almost 7 percent and 5 percent, respectively—of aggregate global and nearly 60 percent of aggregate U.S. carrier capital expenditures.
In August, Credit Suisse said its revised 2012 aggregate Capex forecast for AT&T and Verizon is as follows: 1) total Capex of about $35 billion, which represents a 2 percent year-over-year decline versus the 1 percent decrease in calendar 2011; 2) wireline Capex of about $15 billion, which represents a 10 percent year-over-year decline versus the 8 percent decline in calendar 2011; and 3) wireless Capex of about $20 billion, which represents a 6 percent year-over-year increase versus the 6 percent increase in calendar 2011.
According to the Credit Suisse note, it expects relatively flat growth in aggregate Capex at both AT&T and Verizon and for the larger community of carriers in developed markets, but a shift in Capex—as carriers undertake specific projects focused on revenue generation or cost savings such as wireless backhaul, cloud/data center build-outs, and extension of voice over Internet protocol (VoIP) infrastructure will benefit certain product markets and vendors while posing challenges to others.
Telecom infrastructure companies — Tellabs, Ditech Networks, Sonus Networks, Ciena, Adtran, Alcatel-Lucent, Westell Technologies, Acme Packet, Juniper Networks, F5 Networks and Cisco Systems — have exposure to AT&T.
Interestingly, both Huawei and ZTE, two Chinese telecom equipment makers, are not in this list. Recently, the US Intelligence Committee has requested government agencies to ban these two companies on account of security issues.