“Spend or suffer” is what AT&T needs to do in order to survive the the damage that Apple has done to their network says Gerard Hallaren, Director of Research at TownHall Investment. He estimates that the company needs to spend around $5 billion on their wireless network to catch up to where Verizon is today. That’s a pretty hefty figure considering AT&T spent $21.6 billion on their network between 2006 and September 2009. That’s $480 million per month over 45 months. It pales in comparison to the $25.4 billion Verizon spent during the same span of time, but it’s better than Sprint’s $16 billion. One of AT&T’s problems is that 57% of their operating income comes from the wireless side of the company, while 35% is from the wired unit, yet AT&T only spends 34% of their expenditures on the wireless side and 65% on the wired unit.
It doesn’t take a rocket scientest to figure out that AT&T is pouring more money into a part of the company that makes them less money, and that the CFO should pull a Billy Madison and repeat grades K-12 in the short span of just 24 weeks.
[Via: IT World]