AT&T Looks to the Future and Beyond!

Anders Bylund of The Motley Fool recently noted that AT&T invests more money in future growth drivers than any other American technology business. “Over the last four reported quarters, AT&T showed $23.2 billion of capital expenses according to Capital IQ data. That’s nearly $6 billion ahead of telecom rival and No. 2 spender Verizon Communications. In fact, Intel, well known for investing heavily, came in third-place,” Bylund explained.  AT&T does have $114 billion worth of operating assets; however, the company doesn’t separate growth and maintenance capital expenses in its financial reports. “Backing out AT&T’s depreciation from its trailing capital expenses, then, leaves about $7.5 billion of growth-focused spending. That’s still the largest total in the tech sector,” according to Bylund. You might wonder what AT&T is spending all of this cash on. Chief Strategy Officer of AT&T, John Stankey, said, “Left to their own desires, people want to entertain themselves They want to watch video, and if we think about what’s scaled video consumption looks like over the next five years in this industry and the kind of network infrastructure that’s going to be necessary to truly enable that, and the cost structure that will be required to manufacture the bits that can carry that kind of traffic, we’re playing this for the long haul and the long haul is we generate cash, we reinvest the number one or two position in capital investment in the industry and we believe that that is a sustainable equation with competitive returns on invested capital.” Even though there were rumors flying about that AT&T had halted spending, the company is still working to reinforce their 4G LTE networks, add more cell towers in areas where coverage is lack, and install small cells to dense areas where capacity is needed. In addition to these upgrades, AT&T is working on the next big technology in wireless, usually referred to as 5G. AT&T is working hard to stay ahead of the curve and it’s apparent when you look at how much their investing in their future. (Almost reminiscent of the days of the AT&T Lab days, when they heavily invested in technology, inventing the transistor!)