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AT&T to Invest $14 Billion to Significantly Expand Wireless and Wireline Broadband Networks, Support Future IP Data Growth and New ServicesNEW YORK --(Business Wire)-- AT&T* today announced plans to invest $14 billion over the next three years to significantly expand and enhance its wireless and wireline IP broadband networks to support growing customer demand for high-speed Internet access and new mobile, app and cloud services. The investment plan - Project Velocity IP (VIP) - expands AT&T's (News - Alert) high-potential growth platforms, helping drive continued increases in revenues from existing and new products and services, and earnings per share. "This is a major commitment to invest in 21st Century communications infrastructure for the United States and bring high-speed Internet connectivity - 4G LTE (News - Alert) mobile and wireline IP broadband - to millions more Americans," said Randall Stephenson, AT&T chairman and chief executive officer. "We have the opportunity to improve AT&T's revenue growth and cost structure for years to come, and create substantial value for shareowners. "Revenues in our key growth areas - wireless data, U-verse and strategic business services - are all growing at a strong double-digit rate. Project VIP expands our potential in these key platforms and makes them available to many more customers," Stephenson said. "With our strong balance sheet, these capital investments are manageable. We are very confident in our ability to execute this plan. These are things we've done before - logical extensions of proven technologies and already successful businesses. "Given our confidence in our industry and in our future, today we increased our quarterly dividend for the 29th straight year. I'm confident we can continue to deliver for our owners as we invest to position AT&T for stronger growth in the years ahead," Stephenson said. AT&T's Project VIP consists of several individual wireless and wireline initiatives, which are outlined below. Investing in Mobile Internet Growth
Investing in Wireline IP Network Growth AT&T plans to expand and enhance its wireline IP network to 57 million customer locations (consumer and small business) or 75 percent of all customer locations in its wireline service area by year-end 2015. This network expansion will consist of:
Project VIP Supports New Growth Initiatives Expanding AT&T's 4G LTE network to 300 million people, combined with its leadership in smartphones and data access, provides a large platform for the next wave of growth in mobility, including:
With business customers, AT&T expects Project VIP will strengthen its ability to pursue multiple new billion-dollar business opportunities in four key growth areas: strategic network services, cloud, security and mobility solutions. Investment for Growth Driven by Project VIP and assuming a stable economy, AT&T expects that during the investment period:
AT&T has taken significant steps to further improve its capital structure and strengthen its balance sheet, which provides a financial footing to invest for growth. Over the last three years, the company has reduced its debt by approximately $9 billion, has taken advantage of historically low interest rates to refinance $20 billion in debt, and has reduced its cost of debt by 60 basis points. AT&T recently filed a proposal with the U.S. Department of Labor to contribute a preferred equity interest in its wireless business, valued at $9.5 billion, to the company's pension trust, which will substantially improve the funded status of the plan. AT&T expects to increase its capital intensity to the high end of the mid-teens as a percentage of revenues in the next two years, returning to normal levels in 2015. AT&T expects capital spending to be approximately $22 billion for each of the next three years, then return to pre-Project VIP levels. AT&T expects to complete in 2012 its December 2010 share repurchase authorization of 300 million shares and to continue to buy back shares as market conditions allow under its July 2012 300 million share repurchase authorization. Through October 19, 2012, AT&T had repurchased 271 million shares. Over the next two years, AT&T expects its net-debt-to-EBITDA ratio to move from 1.42 at the end of third-quarter 2012, up to the 1.8 range, aligning with lower interest costs and debt capacity. The company expects this ratio to trend back down in 2015. The company anticipates tapping the debt markets to take advantage of historically low interest rates, with a long-term goal of maintaining its credit rating in the "A" range or higher. And AT&T remains committed to returning value to shareholders. Year to date the company has returned more than $19.6 billion to shareholders through dividends and share repurchases. And today, AT&T announced it will increase its quarterly dividend for the 29th consecutive year. The AT&T board of directors increased the quarterly dividend rate from $0.44 to $0.45 a share on a quarterly basis, which would be an increase from $1.76 to $1.80 a share on an annualized basis. The dividend will be payable on Feb. 1, 2013, to common stockholders of record on Jan. 10, 2013. *AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc. 1 Customer locations for U-verse are those locations which are eligible to receive U-verse. 2 Business buildings with 6 or more tenants 3 EPS guidance does not include one-time significant items that may occur, such as mark-to-market pension adjustments, impairments and other items Find More Information Online:
About AT&T AT&T Inc. (NYSE:T) is a premier communications holding company and one of the most honored companies in the world. Its subsidiaries and affiliates - AT&T operating companies - are the providers of AT&T services in the United States and internationally. With a powerful array of network resources that includes the nation's largest 4G network, AT&T is a leading provider of wireless, Wi-Fi, high speed Internet, voice and cloud-based services. A leader in mobile Internet, AT&T also offers the best wireless coverage worldwide of any U.S. carrier, offering the most wireless phones that work in the most countries. It also offers advanced TV services under the AT&T U-verse® and AT&T ¦DIRECTV brands. The company's suite of IP-based business communications services is one of the most advanced in the world. Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://www.att.com. This AT&T news release and other announcements are available at http://www.att.com/newsroom and as part of an RSS feed at www.att.com/rss. Or follow our news on Twitter (News - Alert) at @ATT. © 2012 AT&T Intellectual Property. All rights reserved. 4G not available everywhere. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners. Cautionary Language Concerning Forward-Looking Statements Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise.
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