Plenty of people get frustrated with their phone company, but AT&T customers may have less to complain about soon. AT&T said on Wednesday that it would increase spending on equipment and infrastructure for its phone and Internet services over the coming years, which should give customers stronger, more reliable service.
In a meeting with investors, the company said it would invest an extra $14 billion to expand its wireless and broadband services over the next three years. The increased spending will, in part, help accelerate AT&T's roll out of its fourth-generation network.
The company said it would spend $22 billion each year through 2015. In past years it has invested $17 billion to $20 billion a year in capital spending, so the additional investment is a significant boost.
“This is a major commitment to invest in 21st century communications infrastructure for the United States,†said Randall Stephenson, AT&T's chief executive, in a statement. H e said the investment would bring high-speed Internet services to millions more people in the United States.
The most obvious outcome of the increased spending will be the expansion of AT&T's 4G LTE network, which is faster and more efficient in transmitting data than its predecessor technology, 3G. The company is well behind its biggest competitor, Verizon Wireless, in building this new network: Verizon has LTE deployed in about 420 cities, whereas AT&T has LTE covering about 80 cities. AT&T said its increased spending will bring LTE to 300 million people by the end of 2014.
AT&T's announcement comes on the heels of a series of partnerships and acquisitions involving other big wireless companies. Last month, T-Mobile USA agreed to buy MetroPCS, a smaller carrier, in order to expand its business. Later, Sprint said it would take a $20.1 billion cash infusion from SoftBank of Japan in exchange for giving the Japanese carrier majority control of the company.
AT&T's investment includes expanding its broadband network, which provides the high-speed Internet service that people use in homes and offices. Its presence in broadband is small compared with cable companies like Comcast. But investing more in broadband would, incidentally, allow AT&T to improve its wireless service, because it would effectively move some smartphone users off its wireless network onto the wired one, which would make the networks less crowded, said Chetan Sharma, an independent mobile analyst.
Tero Kuittinen, an independent mobile analyst, said AT&T's new investment was a pre-emptive move to secure its position as the second biggest carrier in the United States. He said it would enable the carrier to come up with new pricing structures - for example, bundling its broadband Internet service with its wireless phone service into a package - if it needed to compete more aggressively against the smaller carriers.
“They have this possibility of so me day, if they feel any pressure from Sprint or T-Mobile, to suddenly say you get 20 percent off from your mobile bill if you buy the bundle,†Mr. Kuittinen said. “There's some anxiety over what T-Mobile and Sprint are doing.â€
The additional investment will also apply to some new AT&T services, like mobile payments and wireless services inside cars. It shows that among the big American wireless companies, AT&T is the most aggressive carrier exploring new ways to make money, Mr. Sharma said.
