AT&T Inc. (T) today delivered on last year’s promise to cut capital spending in 2009, announcing it expects a drop of 10 to 15 percent as opposed to its outlays last year – and pushed out its U-verse goal by one year.
The capital cuts could total well over $2 billion as AT&T says it spent $20.3 billion on this spending in 2008.
AT&T stressed that it expects to make “continued good progress on its U-verse network build in 2009.” Deployment currently reaches 17 million living units, says AT&T, adding it expects to reach its previously announced target of 30 million living units in 2011, a year later than its original plan.
The one-two punch is bad news for AT&T’s network suppliers and for the service’s IPTV service, which will not be as widely available to consumers as the telco had planned. AT&T did not say in press materials what areas would be affected by the capital spending cuts.
The capital spending reduction was revealed when AT&T announced plans for big layoffs late last year.
AT&T did make its long-stated U-verse TV goal of amassing one million customers by yearend 2008, news it announced in the middle of last month.
AT&T announced a U-verse net gain of 264,000 subscribers in the fourth quarter, up from 232,000 added in the third quarter of 2008, to reach more than one million in service. This growth “reflects the high quality of the AT&T U-verse video experience, a large array of High Definition channels and a host of attractive features.” AT&T U-verse network deployment more than doubled during 2008 and now passes 17 million living units.
In contrast, Verizon Communications Inc. (VZ) did not reveal capex cutbacks, nor slower FiOS deployment in its earnings event yesterday.
Verizon claimed it added 303,000 FiOS TV users in the fourth quarter of last year, its best ever quarterly figure, adding that it’s added roughly one million users since the end of 2007.
Industry watchers had been, and still are, waiting to see what milestones AT&T planned for this year after a busy 2008. Beyond the newly extended rollout plan, it’s unclear what specific goals the provider has for U-verse.