AT&T earmarks $11 billion for wireless, wireline broadband in '09

AT&T will spend more than $11 billion to expand and improve its 3G wireless and wireline broadband networks in 2009.

The centerpiece of the company's investment will be the continued expansion of its GSM-based 3G network, which AT&T plans to expand to 20 new markets in 2009 while adding more than 2,100 cell sites across the United States. The company says that it plans on "nearly doubling" its total 3G network capacity by using additional spectrum on the 850MHz band. AT&T will also work to increase its 3G networks' peak speeds by trialing technology with a 7.2Mbps peak downlink speed, with the eventual goal of upgrading the network to handle "speeds as high as 20Mbps."

AT&T CEO Randall Stephenson says that despite the current recession, AT&T needs to invest heavily in wireless capacity to keep up with consumer demand for bandwidth.

"Data traffic on our network is growing more than 50% year over year on average," he says. "We expect demand will only escalate when the larger economy rebounds."

In addition to expanding its 3G network, AT&T plans to perform customer trial runs of its 3G Microcells that will use femtocells to route wireless traffic through home broadband connections; to further expand a Wi-Fi footprint that currently totals more than 20,000 hotspots in the United States; and to make its U-Verse fiber service available to more than 30 million users by 2011.

The $11 billion-plus investment for wireless and wireline broadband network expansion accounts for roughly two-thirds of AT&T's planned capital expenditures for 2009, which the company says will total between $17 billion and $18 billion. AT&T's 2009 capital expenditures will be at least $2 billion less than the $20.3 billion the company spent on capital expenditures in 2008.

AT&T says that its investments in 3G wireless expansion will create 3,000 jobs in its mobility, broadband and video segments. These additions, however, will be more than offset by the 12,000 employees that the company has committed to laying off in 2009.

Last month, AT&T said it was committing $1 billion to upgrade its global IP network with a particular emphasis on adding business applications such as managed hosting, content delivery and telepresence.