As Verizon Communications announced plans to boost its enterprise operations through the acquisition of XO’s fiber unit, chief rival AT&T took steps of its own to improve its position in the enterprise market with plans to invest $10 billion this year in its global business solutions division. Steve McGaw, the chief marketing officer of AT&T’s business unit, confirmed Monday that the $10 billion outlay constitutes nearly half of AT&T’s total capital investment budget of $22 billion for 2016. The investment also highlights AT&T’s recent shift in emphasis toward broadband-driven business network operations on a global scale as Verizon, T-Mobile and other competitors in the U.S. wireless market continue to chip away at AT&T’s share of that sector. While statistics show that AT&T lost 256,000 postpaid wireless customers in the U.S. during the fourth quarter of 2015, T-Mobile added 917,000 postpaid subscribers and Verizon and Sprint added 449,000 customers and 366,000 customers, respectively, during that same period.
Among other things, the $10 billion investment will be earmarked toward (1) the integration of 6,000 kilometers of fiber infrastructure, currently used in support of AT&T’s Mexican wireless operations, into the AT&T wireline network, (2) further development of these wireline facilities through the addition of global network nodes, (3) expansion of AT&T wireline and wireless network facilities to additional cities throughout the world, (4) network security improvements, and (5) expansion of U.S. and European network infrastructure used in support of the Internet of Things (IoT), which provides broadband connectivity to automobiles, household appliances and a range of other devices. The upcoming debut of fifth generation (5G) wireless networks is expected to fuel IoT development, and AT&T’s announced investment dovetails with the company’s disclosure earlier this month that it will begin field trials of 5G technology by year’s end.
Explaining the impetus behind his company’s investment plan, AT&T Vice Chairman Ralph de la Vega observed that “business is moving faster than ever, and companies around the world need to be agile to quickly adapt to changing markets.” McGaw voiced similar sentiments in declaring that, “by bringing the entire scope of the AT&T capabilities to bear, we’re helping our customers turn trade-offs of the past into combination plays of the future.”