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AT&T plots $14 billion network build out; Sprint nabs spectrum

Of the $14 billion AT&T will spend over the next three years, $8 billion will be for wireless and $6 billion for wireline. Sprint buys spectrum to bolster its 4G LTE rollout.
Written by Larry Dignan, Contributor

AT&T and Sprint are making moves to build out and bolster their networks to better compete with the likes of Verizon.

In a statement, AT&T said that it will spend $14 billion to improve its wireless and wireline broadband networks. According to AT&T, it will cover about 300 million people with its 4G LTE network by year end 2014.

Meanwhile, AT&T plans to deploy fiber optic lines to reach more than 1 million new business customers by the end of 2015. The bet for AT&T revolves around advanced enterprise data services.

Of the $14 billion AT&T will spend over the next three years, $8 billion will be for wireless and $6 billion for wireline. Total capital spending will be $22 billion for each of the next three years.

The AT&T investment plan is dubbed Project Velocity IP (VIP), an effort to derive most of the company's revenue from high growth areas. The news comes after a strong third quarter report for AT&T.

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As for earnings, AT&T said it expects earnings to grow in the mid-single digit or better range. Revenue growth will mirror gross domestic product plus 100 basis points. In other words, AT&T expects growth to be a bit better than the economy.

For Sprint's part, the company said it will acquire PCS spectrum from U.S. Cellular in a deal valued at $480 million. The spectrum will allow Sprint to bolster coverage in the Midwest of the U.S. as it deploys its 4G LTE network.

Sprint recently landed a cash infusion from Softbank so it can build out its network to better compete.

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