AT&T Pegs 2019 Capex Guidance in $23B Range, Despite 5G Push

Dan Jones
11/30/2018

AT&T is pegging its 2019 capital expenditure guidance in the $23 billion range, even with a heavy push on adding more 5G cities in 2019.

In its October 24 third-quarter earnings, AT&T Inc. (NYSE: T) kept to its 2018 capex predictions at $22 billion. The operator currently plans to launch 5G in 19 cities in 2019, after a initial debut at the end of this year -- what's left of it! -- in parts of 12 US markets. (See AT&T: 5G by End of Year, but No Commercial Launch Date Yet.)

So why isn't AT&T's capex expected to grow with 5G?

AT&T gave a couple of reasons at its analyst day on Thursday:

  • AT&T is expecting to offset the capital intensive network with new revenue from WarnerMedia, LLC and its Xandr advertising unit.

  • AT&T has been building its FirstNet public safety network all year. The company is "six months ahead of schedule," according to communications unit CEO John Donovan. So, AT&T says it is close to a $1.6 billion payment from the federal government with more to follow. (See AT&T on Track With 5G, Starts FirstNet Build.)

The 700MHz FirstNet build is important to watch in terms of AT&T's 5G and LTE services. The tower teams will add support for what Donovan calls "fallow spectrum" in the mid-band with "5G-ready" radios. Namely, AT&T can fire up service on the AWS-3 bands (1695-1710 MHz/1755-1780 MHz/2155-2180 MHz) and WCS band (2.3GHz). (See AT&T Gets WCS Approval, Adds 4G Markets and FCC Mid-Band Auction Nears $45B in Bids.)

Why does this matter? Well, as AT&T execs have said before AT&T isn't purely focused on using millimeter wave high-band spectrum for 5G. So WCS and AWS-3 "fallow" spectrum could form part of a mid-band 5G backbone for Ma Bell eventually. (See AT&T: We're Not Only Focused on mmWave for 5G.)

— Dan Jones, Mobile Editor, Light Reading

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