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AT&T To Invest $14 Bln To Expand Wireless And Wireline Broadband Networks

AT&T Inc. (T) announced Wednesday that it plans to invest $14 billion over the next three years to expand and enhance its wireless and wireline IP broadband networks to support growing customer demand for high-speed Internet access and new mobile, app and cloud services. The company said that the investment plan - Project Velocity IP or VIP - expands its high-potential growth platforms.

The company plans to expand its 4G LTE network to cover 300 million people in the United States by year-end 2014, up from its current plans to deploy 4G LTE to about 250 million people by year-end 2013.

The company noted that it plans to expand and enhance its wireline IP network to 57 million customer locations or 75 percent of all customer locations in its wireline service area by year-end 2015.

The company expects that during the investment period earnings per share will grow in the mid-single-digit or better range, with an opportunity for stronger growth going forward. Consolidated revenues will grow to GDP plus 100 basis points.

The company expects to increase its capital intensity to the high end of the mid-teens as a percentage of revenues in the next two years, returning to normal levels in 2015. AT&T expects capital spending to be approximately $22 billion for each of the next three years, then return to pre-Project VIP levels.

The company's board of directors increased the quarterly dividend rate from $0.44 to $0.45 a share on a quarterly basis, which would be an increase from $1.76 to $1.80 a share on an annualized basis. The dividend will be payable on February 1, 2013, to common stockholders of record on January 10, 2013.

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