SDN, NFV, 5G Part of AT&T’s 2018 Capex Splurge

AT&T’s SDN, NFV, and 5G plans will eventually allow the carrier to reduce capex that is currently running at an escalated clip. That pace is being propelled by those network plans as well as integration costs tied to recent acquisitions. Speaking at the Oppenheimer Technology, Internet, and Communication Conference this morning, AT&T CFO John Stephens fielded questions about the carrier’s capex forecasts. As part of its most recent quarterly earnings release, AT&T noted it expected total 2018 capex of around $25 billion. The carrier spent $21.6 billion on capex last year, and $22.4 billion in 2016. By contrast, rival Verizon recently said it was on track to spend around $17 billion on capex this year. Stephens said part of that investment was tied to its ongoing efforts to gain SDNcontrol of 75 percent of its network assets by 2020. Those efforts remain on track and are expected to eventually reduce total capex. “But once you get there those investments you are making to achieve that goal ebb out. They either come down or effectively stabilize,” Stephens said. “So then you have the full benefit of that.” 5G Prep: AT&T is also looking to eventually drive down 5G deployment costs. Stephens noted that current network upgrades will allow the carrier to perform software upgrades to its sites to activate 5G services. He explained that was part of the carrier’s NFV story as well. “That leads you to the ability to bring down capex,” Stephens said. The carrier does, however, remain committed to a mobile 5G future instead of a fixed 5G business case. Stephens said that the carrier’s extensive fiber deployment reduces its business case for a fixed 5G service that would end up being a more expensive proposition for customers. “We can do that and our technologists have the capability to line it up, so we are clearly capable and ready to do that,” Stephens said, adding that at this point it was just a cost equation in terms of serving a neighborhood with a fixed 5G service. AT&T is planning to launch a mobile 5G service in a dozen markets this year. That deployment will be based upon the 3GPP non-standalone 5G NR standard. Those plans are in contrast to rival Verizon, which is focusing its initial 5G deployments on a fixed service that would be similar to a home broadband offering.