AT&T Plans $1B Global Spend

Despite its plans to reduce its overall 2009 capital expenditures by between 10 percent and 15 percent, AT&T plans to maintain its international investments at the 2008 level of $1 billion, the operator announced today. (See AT&T Cuts Capex by up to $3B.)

For 2009, the carrier is highlighting its continued investments in: subsea networks; its European data centers in the Netherlands and the U.K.; hosted and managed services; and Ethernet services for corporate customers.

In Europe alone AT&T is launching its Ethernet services, including its MPLS-based virtual private LAN offering dubbed OPT-E-WAN, in seven new markets -- Austria, Czech Republic, Finland, Hungary, Poland, Russia, and Slovakia.

Last year's capex was focused on similar investments. (See AT&T's $1B Global Capex Pledge.)

But given the impact of the economic slowdown, and AT&T's admission late last year that it was reviewing its investment plans, did the carrier actually invest that much in 2008? (See AT&T Global Sees Virtual Growth.)

AT&T says "Yes," but then appears to confirm it didn't, actually. According to an emailed response to questions from Light Reading, the carrier noted that its "2008 investment funding was fully allocated for a variety of programmes – some of which were multi-year initiatives." So, $1 billion "allocated" at least...

But what of this year? AT&T's senior VP of product management, Joe Lueckenhoff, says that, as more customers shift towards IP-based service plans and ramp up their use of video services, the plan is to spend a greater proportion of AT&T's investments on applications rather than infrastructure.

Among the plans for 2009 are:

• Offering Ethernet access to VPNs in four additional markets, taking the total to 38
  
  
• Offering DSL access to VPNs in six additional markets, taking the total to 44
  
  
• Offering virtual private LAN services in 17 additional markets, including the seven European markets mentioned above, plus Brazil, Canada, India, Malaysia, Mexico, New Zealand, South Africa, South Korea, Philippines, and Taiwan
  
  
• Initiating a "multi-year plan to deliver a full complement of IPv6 networking services that will also preserve customers’ existing IPv4 investment"
  
  
• The launch of telepresence services in China, in partnership with local service providers
  
  
• Enhancements to AT&T's utility computing service, dubbed Synaptic Hosting, including increased automation (see AT&T Goes Synaptic)
  
  
• Extending AT&T's content distribution service into Mexico, and boosting it in "high growth areas such as Brazil, India and China"
  
  
• Enabling the global management of multiple mobile operator contracts for multinational companies
  
  
• Enhancing network monitoring and management tools for customers, and expanding firewall capabilities
  
  
• Deploying additional Cisco Systems Inc. (Nasdaq: CSCO) CRS-1 core routers and new 10 Gbit/s edge switches to boost network capacity and performance
  
  
• Adding new subsea capacity to "Alaska, Australia, Asia/Pacific, India, Puerto Rico, and the Caribbean, and on transatlantic routes to Europe" (AT&T says it owns capacity in 83 subsea cables globally)

News of the planned investments comes as BT Group plc (NYSE: BT; London: BTA), one of AT&T's main international services rivals, continues to grapple with problems in its Global Services division, and as Telefónica SA (NYSE: TEF) emerges as a new competitor in the international services market. (See BT Reports Q3, BT Sticks With Plan A, and Telefónica's New Battleground.)

— Ray Le Maistre, International News Editor, Light Reading