AT&T to invest $1 bln worldwide for expansion

NEW YORK, USA: Top US phone company AT&T Inc said on Wednesday it will invest $1 billion worldwide this year to build four undersea cables and expand its global network in response to growing Internet traffic.

The bulk of the investment will be spent overseas, and will be 33 per cent higher than the $750 million AT&T spent in 2007 on similar operations, part of its total capital spending of $18 billion, the company said.

San Antonio, Texas-based AT&T said investment in undersea fiber optic cables to Japan and the rest of Asia will aim to diversify communications lines to the region, where earthquakes occasionally disrupt Internet traffic.

AT&T will also invest in existing cables in India and the Middle East and build nodes, or switches to route network traffic, in Europe, Asia and the United States.

The announcement showed that despite worries of slower technology spending by businesses and phone companies, increasing use of the Internet, particularly bandwidth-heavy video and voice services was driving investment in communications networks.

Shares of AT&T rose 1.26 percent to $35.31 by mid-afternoon trade on the New York Stock Exchange.

While best known for its home phone and mobile services, AT&T is seeking to boost its business of providing phone services to corporations, including global companies with overseas operations.

Ron Spears, group president of AT&T's global business services division, said companies around the world were seeing an "exploding need to delivery voice, data and video in real time."

"It is vital that we continue to invest in those geographies and services to meet this demand so our customers can connect their operations, partners and suppliers," he said.

As part of the announcement, AT&T's India chairman VS Gopi Gopinath told reporters in New Delhi that the company would build a data center in Bangalore by December.

In 2007, revenue from the Asia Pacific revenue including India grew 22 percent from a year earlier, making it the fastest growing region for AT&T. Revenue from India grew by 85 percent in 2007, Gopinath said.