AT&T has pledged to invest an extra USD 1 billion in the US next year if Congress approves the corporate tax reforms proposed by the Trump administration. These would notably reduce the corporate tax rate to 20 percent from 35 percent and allow accelerated depreciation of investments over the next five years.
The reforms would allow AT&T to write off new capital expenditure more quickly. The company said the extra spending would go towards the roll-out of fibre to homes and businesses and would apply in the first year the new tax law applies. Beyond 2018, a lower tax rate would also give AT&T an incentive to deploy incremental capital to its fibre and future 5G builds, the company said.
AT&T CFO John Stephens made the announcement at the Wells Fargo Media & Telecom conference. He also said that there is now uncertainty about when the company's planned takeover pf Time Warner will close. AT&T is in discussions with the US Department of Justice regarding the acquisition, he said without commenting further. The company previously expected to close the deal by year-end.
Sources familiar with the matter told CNBC that the Justice Department is demanding that AT&T sell Turner Broadcasting, which includes CNN, or sell pay-TV provider DirecTV for approval of the merger with Time Warner. AT&T reportedly offered to sell CNN, the Financial Times reported, but the DoJ said this was not enough to resolve its competition concerns.
