AT&T to boost spending to $22 billion a year for three years

DALLAS, Wed Nov 7, 2012 – AT&T Inc. will increase capital spending by as much as 16 percent to $22 billion a year for the next three years to fund upgrades to its wireless and wireline networks, the company said on Wednesday, sending its shares down more than 3 percent.

AT&T needs to invest to compete with Verizon Communications Inc., which is ahead in its wireless network upgrade, and to take advantage of emerging businesses such as cars with built-in wireless Internet connections.

AT&T said it decided to upgrade its wireline network as other options such as carving off the wireline business or divesting parts of the network were not as attractive financially. It previously said it was considering selling some rural phone lines.

“This gives us the opportunity to improve our top line growth and change our cost structure,” CEO Randall Stephenson told analysts at an AT&T event in New York.