AT&T has said that investment in its Project VIP network enhancement program has peaked, and that capex for 2015 will decrease. The announcement, at the end of its announcement that it has acquired Mexican wireless network operator Iusacell for $2.5 billion, sent shares of optical technology stocks tumbling on Monday. Ciena shares fell 5.9% and Alcatel-Lucent shares fell 3.9%.
Project VIP was designed to upgrade AT&T’s wireless and wireline networks to meet the carrier’s needs for growing capacity. The company says its network upgrade plans are largely ahead of schedule. They have essentially finished their 4G LTE network expansion. They have also connected wired high-speed Internet service to 57 million U.S. customer locations.
Therefore, AT&T has confirmed previous indications that VIP-related spending reached its peak this year and that it won’t need to spend as much in capex in 2015.
AT&T’s capex reductions for 2015 follow rumours that Verizon is also considering shutting off its capex spending for the year.
For details on AT&T’s announcement, see http://about.att.com/story/att_to_acquire_mexico_wireless_provider_iusacell.html