Technology: Communications Equipment | Michael Genovese, Managing Director/Senior Analyst | November 10, 2014 (Read Report)

AT&T says 2015 capex will be $18bn or ~15% lower than 2014. Last Friday after the close, AT&T announced plans to acquire Mexican wireless company, lusacell, for $2.5bn. AT&T also said its U.S. Project VIP network investment plan is ahead of schedule, with 2014 representing a peak for spending. The carrier’s 2015 capex is targeted to be in the $18bn range compared to $21bn in 2014. This is obviously negative news for the Comm Equipment industry, including ADTN, JNPR, ALU, CSCO, CIEN, JDSU and FFIV, but the impact is not equal for all. It also makes the few companies that don’t have AT&T exposure, such as INFN and NOK, look relatively more attractive. Later in this note we explore the vendor-specific implications of the news. (Read more)