Maybe AT&T Won't Accelerate Capex
Here's a contrarian theory: AT&T Inc. (NYSE: T) is not ready to quickly ramp capital expenditures now that it's walked away from the T-Mobile US Inc. merger.
"The books are already largely closed on 2012 capex, and it is unlikely that there will be much spending during the annual planning finalization meetings in January," analyst Mike Genovese of MKM Partners writes in a note issued Wednesday morning.
Genovese doesn't expect to see unusually big spending out of AT&T early in 2012, in other words.
Analyst Simon Leopold of Morgan Keegan & Company Inc. agrees somewhat. In a note published Tuesday, he predicted AT&T "might remain frugal" since it's taking a $4 billion charge to pay a kill fee to Deutsche Telekom AG (NYSE: DT), T-Mobile's owner.
The opposing theory is that AT&T sans T-Mobile will start pouring money into its own network. AT&T had "aggressively dialed back Q4 spending" and has given some vendors the impression that first-quarter 2012 spending will be aggressive, wrote analyst George Notter of Jefferies & Company Inc. in a Tuesday note. (See AT&T/T-Mobile: Happy Xmas, Gear Vendors!.)
Of course AT&T does need to put some money into its network. The big catch-up areas will be 3G and optical networking, Genovese writes -- the latter being particularly good news for domain vendor Ciena Corp. (NYSE: CIEN) and "to a lesser extent, Alcatel-Lucent (NYSE: ALU)."
Keep up with all our AT&T/T-Mobile coverage here.
— Craig Matsumoto, West Coast Editor, Light Reading