Telco sets $14 billion capital infusion for wireless, broadband networks

AT&T is expanding the footprint of U-Verse as part of a $14 billion capital infusion into its wireless and broadband networks announced Wednesday.

U-Verse, which bundles TV, Internet and phone service, will be made available in an additional 8.5 million to 33 million homes by 2015 as part of the telco’s Project Velocity IP initiative. The speed of U-Verse will be tripled downstream to 75 mbps.

The bulk of the spending on Project VIP will go toward 4G LTE network expansion to cover 300 million people nationwide by the end of 2014. That’s an upgrade of current plans to deploy LTE to some 250 million people by the end of 2013.

“This is a major commitment to invest in 21st century communications infrastructure for the United States and bring high-speed Internet connectivity — 4G LTE mobile and wireline IP broadband — to millions more Americans,” said AT&T CEO Randall Stephenson in a statement.

FCC chairman Julius Genachowski hailed AT&T’s investment as “proof positive that the climate for investment and innovation in the U.S. communications sector is healthy.”

The expansion of U-Verse comes as third-quarter subscription numbers for top MSOs indicate that the growth of the telcos in the pay TV business, which includes Verizon Fios, continues to soften in part because their footprints ceased expanding years ago.

Making U-Verse available to more homes could goose future growth and offset the creeping evidence of cord-cutting across the MSO landscape when cable and satellite numbers are taken into account. U-Verse added 198,000 subs in the third quarter, according to Bernstein Research, for an increase of 4.6% over the same quarter a year ago but is still down from increased levels reached in 2009 and 2010.

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