Wireless Steeplechase: Verizon LTE, AT&T/Verizon CAPEX Trends
Digesting Verizon's and AT&T's results from last week one can clearly notice a downward pattern for the second half of 2011. AT&T guided its total CAPEX down YoY 14% for 2H11, while Verizon followed suit, down 16%. A softer spend in the second half of the year is a bit rare, given the usual trend of back-end loaded CAPEX for AT&T and Verizon and could have ramifications to network infrastructure vendors with exposure to both carriers. Verizon 1H11 wireless CAPEX was $400 million higher than expected, suggesting a front-end load. AT&T fixed and mobile spend in the first semester of 2011 was stronger than previously anticipated.
On the positive side, Verizon Wireless sold 1.2 million LTE devices in Q2, and its 4G buildout continues strong (LTE now live in 102 markets and Verizon claims it will be 175 markets covering 185 million POPs by YE 2011). This indicates that in the second half of the year, the LTE CAPEX will continue to ramp up, at the expense of other legacy technology (e.g. CDMA EV-DO).