Telecoms continue to spend on mobile networks, despite recession
September 28, 2009
AT&T and Verizon Communications will combine to spend $35 billion on network construction in 2009, in spite of a long list of concerning news for the U.S. economy.
The saturation of the high-speed internet market, smaller competitors offering discounted plans, and floundering consumer spending do not trouble the nation's two biggest telecommunications companies. "I don't care about that anymore," Verizon CEO Ivan Seidenberg told a Goldman Sachs investors conference on Thursday.
The telecom titans seem to be banking on a steadily increasing demand for bandwidth, as wireless networks begin to provide new and more robust services, such as GPS. As wireless consumers grow to expect higher speeds and better functionality, the capability to provide more raw data at a given time will become critical.
The news is not all rosy for AT&T and Verizon. The former has lost 7.5 percent of its stock value in 2009, while the latter's share price is down 13 percent. But owning the wireless pipelines in an increasingly wireless world could drastically reverse their failing fortunes.
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