AT&T To Cut Capital Spending In 2009


AT&T plans to reduce its capital spending to $17 billion to $18 billion this year, in line with previous guidance that capex would be as much as 15% lower than 2008.

The telco announced Tuesday that approximately two-thirds of its 2009 capex will be invested in building out wireless and wired broadband networks to increase coverage, speed and capacity. AT&T's capital spending in 2008 was $20.3 billion.

In January, AT&T announced it expected to reduce capex and said its U-verse network build would reach its previously announced target of 30 million living units in 2011, a year later than originally planned. The U-verse fiber-to-the-node network currently passed 17 million customer premises.

AT&T expects to add nearly 3,000 jobs in 2009 to support wireless, broadband and video. However, as previously announced, the company expects to reduce jobs in other areas -- primarily its wireline operations -- due to "economic pressures, a more streamlined organizational structure and continued shift among residential customers from wired voice services to wireless and broadband." In December AT&T announced it would cut 12,000 jobs.

On the wireless front, AT&T will expand coverage of 3G services in nearly 350 U.S. metropolitan areas, including the planned addition of more than 2,100 new cell sites across the country. Additionally, AT&T said it will expand 3G service to 20 new markets this year.

AT&T said it will enhance its GSM/HSPA network, initiating trials of 7.2-Mbps peak downlink speeds and evolving to speeds as high as 20 Mbps.