Recognized as one of the top global providers of IP communications services to businesses, AT&T (News - Alert) aims to connect people with their world by creating new solutions for consumers and businesses and by driving innovation in the communications and entertainment industry. AT&T announced plans to invest $14 billion over the next three years to expand its wireless and wireline IP broadband networks in the United States to support high-speed Internet access and new mobile, app and cloud services.
The investment plan focuses on expanding its wireless reach by expanding its 4G LTE (News - Alert) network to 300 million people, buying more spectrum and deploying small cell technologies. Called Project Velocity IP (VIP), the efforts are expected to support AT&T’s consumer initiatives around IP home security and automation, mobile premises solutions, mobile wallet and connected cards. The new mobile premises solutions are an alternative for wireline voice service and in the future will include high-speed IP Internet data services.
“This is a major commitment to invest in 21st Century communications infrastructure for the United States and bring high-speed Internet connectivity — 4G LTE mobile and wireline IP broadband — to millions more Americans,” said Randall Stephenson, AT&T chairman and chief executive officer, in a statement. “We have the opportunity to improve AT&T's revenue growth and cost structure for years to come, and create substantial value for shareowners.
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With business customers, AT&T expects Project VIP to support four growth areas: strategic network services, cloud, security and mobility solutions. AT&T Advanced Mobility Solutions help customers transform their businesses so that people, processes and assets are always connected and can be optimized on the go.
“Revenue in our key growth areas — wireless data, U-verse and strategic business services — are all growing at a strong double-digit rate. Project VIP expands our potential in these key platforms and makes them available to many more customers,” Stephenson said. “With our strong balance sheet, these capital investments are manageable. We are very confident in our ability to execute this plan. These are things we've done before – logical extensions of proven technologies and already successful businesses.”
Project VIP is expected to provide high-speed IP Internet access via IP wireline and/or 4G LITE to 99 percent of customer locations in wireline service areas.
AT&T has taken significant steps to further improve its capital structure and strengthen its balance sheet, which provides a financial footing to invest for growth. Over the last three years, the company has reduced its debt by approximately $9 billion, has taken advantage of historically low interest rates to refinance $20 billion in debt and has reduced its cost of debt by 60 basis points. AT&T recently filed a proposal with the U.S. Department of Labor to contribute a preferred equity interest in its wireless business, valued at $9.5 billion, to the company's pension trust, which will substantially improve the funded status of the plan.
“Given our confidence in our industry and in our future, today we increased our quarterly dividend for the 29th straight year. I'm confident we can continue to deliver for our owners as we invest to position AT&T for stronger growth in the years ahead,” Stephenson said.
Edited by Amanda Ciccatelli