U.S. wireless carriers AT&T and Verizon shelled out a combined $35 billion in capital expenditures last year, earning them the top two slots on the Progressive Policy Institute’s (PPI) new list of big spenders in 2015.
According to the report, AT&T and Verizon spent more on capex than several other notable nonfinancial companies last year, including oil giant Exxon Mobile, dominant retailer Walmart and tech and telecom titans Alphabet, Comcast, Apple, Microsoft and Intel.
With capital expenditures totaling $18.73 billion, AT&T took first place and alone outspent Alphabet and Comcast’s combined $16.8 billion. Verizon, the second highest spender with $16.55 billion in capex output, nearly matched the combined $16.84 billion in investments from Apple, Microsoft and Intel in 2015.
Fellow tier-1 carriers T-Mobile and Sprint were not among the top 25 capex spenders, according to the report.
PPI said telecommunications and cable companies as a whole, though, represented the largest share of estimated domestic capital spending on its list. The sector’s $48.09 billion output exceeded spend from the second place sector – energy production and mining – by more than $14 billion.
PPI said AT&T and Verizon’s massive investments were mainly driven by the need to maintain and expand their networks. But despite the sheer size of the figures, PPI said capital expenditures from A&T and Verizon as well as the sector overall were down.
“According to our estimates, AT&T’s capital expenditure was down by 11.6 percent as compared to the previous year,” PPI said in the report. “Verizon boosted domestic capital expenditures in its wireless operations in 2015 in order to increase the capacity of its 4G LTE network. However, this rise in investment was largely offset by a decrease in their wireline segment capital spending, resulting in a net increase in investment of only 3.4 percent as compared to 2014.”
PPI also said spending in the telecom and cable sector as a whole was down by 1.3 percent year over year in 2015. And that trend looks like it will continue into 2016.
From the first half of 2014 to the first half of 2016, PPI said AT&T’s capital investments dropped 16.7 percent while Verizon’s slid only slightly less at 14.4 percent.
PPI attributed the capex drop in part to regulatory anxieties, but noted it’s best to judge capital spending trends over longer periods.
“While it’s far too soon to draw a direct connection between regulatory changes by the FCC and spending by the telecom industry, it seems possible that the prospect of continued regulatory upheavals—including the potential for rate regulation—is influencing capital investment in the U.S.,” the report said.
