AT&T said today that it plans to spend $1 billion this year on delivering all-IP networks to business customers and on undersea fiber, the same amount it planned to spend on these items last year. That makes a total of $3 billion spent on delivering IP access for businesses since 2006, and affirms AT&T’s commitment to this business after announcing earlier this year that it would cut its capital expenditures by up to $3 billion in 2009, spending as little as $17 billion all told.
Cisco looks to be a winner — one of the line items in AT&T’s press release includes “adding more Cisco CRS1 routers on key routes.” AT&T also said it would deploy new edge routers capable of delivering 10 Gbps, which may mean Cisco could find a home for its recently launched ASR-1000 edge routers, which were introduced with much fanfare last year.
AT&T cloud services, also launched last year, got a boost, too, with AT&T indicating that it will expand its “Synaptic Hosting” platform in five data centers, and will add more applications from Oracle and SAP that can be delivered via AT&T’s cloud. Business access and services are part of AT&T’s wireline IP access business, which also includes the consumer oriented, triple-play U-verse service. Sales in the wireline IP access business grew 14 percent for the fourth quarter, helping mitigate losses in AT&T’s landline business.
However, growing the IP wireline access business while still having to support the traditional wireline business is kind of like paying two mortgages while waiting to sell an old home after buying a new home. AT&T still has to spend money to keep its traditional wireline businesses going, but it knows that’s not where it will spend its future.