AT&T said it will have to upgrade its network in the areas that were formerly controlled by BellSouth before it can even begin to start running fiber close enough to subscribers for them to get U-verse services.
The result will be that AT&T expects to spend as much as a half a billion dollars more on U-verse than most recently reported, to reach 1 million fewer homes passed than it had planned to have by the end of 2008.
The admissions were included in the company’s most recent 10-Q. Using figures in millions, the company wrote, “We expect spending to be between $4,500 to $5,000 on our U-verse services for network-related deployment costs and capital expenditures from January 2007 through the end of 2008, and we will be shifting some of that capital to start-up costs to expand into the initial markets in the Southeast region. Since these start-up activities are in preparation for, but do not immediately result in, passing living units, there is a corresponding change in living units we expect to pass by the end of 2008 to approximately 17 million.”
The most recent spending estimate was $4.5 billion to $5 billion (that range was an increase from original projections), and the most recent homes-passed target was 18 million by the end of 2008.
AT&T’s 10-Q concluded by saying, “Additional customer activation capital expenditures are not included in this capital spending forecast. We expect that the business opportunities made available, specifically in the data/broadband area, will allow us to expand our products and services.”