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AT&T Shifting Capex to App Support

AT&T is spending more of its annual capital budget adding infrastructure to support applications, including mobility apps and apps that are specific to industry verticals, according to the 2010 spending plans for business services announced today. AT&T is also making a significant investment in its platform to improve small to mid-sized business services. (See AT&T to Spend $1B on Biz Service Upgrades.)

The $1 billion figure is similar to the budgets of 2008 and 2009, but the spending priorities are shifting as AT&T, like other service providers, gets more into managed services and support for specific applications, says Joe Lueckenhoff, senior vice president for business product management. (See AT&T's $1B Repeat .)

On the mobility side, for example, AT&T's Mobile Enterprise Application platform will enable customers to extend the reach of their existing applications, including things such as sales force management and inventory management, and extend them to different types of smart mobile devices, regardless of the device operating system, Lueckenhoff said.

"We've announced the fact that we are managing Shell's global subscribers all over the world and we are doing that with some other customers as well," Lueckenhoff.

AT&T also will be spending more on infrastructure to support applications including managed hosting, cloud-based offerings, telepresence, unified communications, managed security, and other hosted applications.

One exception to that is the expansion of AT&T's Ethernet footprint, which will reach 39 countries this year, up from 31, Lueckenhoff says. In addition, AT&T will deploy new equipment and network facilities, upgrade existing equipment, and add diversity to existing networks in order to offer Gigabit Ethernet access in 11 European countries, much of Asia Pacific, and Argentina, Brazil, Canada, Mexico, Panama, and Peru.

In the US, Ethernet is also a priority, as AT&T plans to roll out a new switched metro Ethernet service in its 22-state local service footprint in the US.

The $1 billion figure is tied, somewhat, to the global economy, since AT&T builds its budget based on expectations of customer needs, and those needs are impacted by how many employees companies expect to have, Lueckenhoff adds. Not included in the $1 billion figure, however, is what AT&T calls "success capital" or money spent to support additional services to customers in areas where the physical network is already constructed, he says.

For example, Lueckenhoff says, as more customers look to AT&T to provide managed services that include on-premises gear, such as servers or routers, purchase of that equipment for the network would not be included in the $1 billion projection.

The SMB investment is intended to increase broadband speeds and speed up service provisioning in what is becoming a more competitive market, thanks to the entry by cable and the ongoing efforts of competitive local exchange carriers.

— Carol Wilson, Chief Editor, Events, Light Reading

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