AT&T Feels Pinch Of Slowing Economy

AT&T FEELS PINCH OF SLOWING ECONOMY
[SOURCE: Wall Street Journal, AUTHOR: Dionne Searcey dionne.searcey@wsj.com]
Speaking at a Citigroup Inc. investor conference, AT&T chief Randall Stephenson said the company cut off service to subscribers of some of its consumer businesses in the fourth quarter of last year. He was responding to a question from an analyst about where AT&T was experiencing impact from overall weakness in the economy. AT&T is the largest phone company in the U.S. by revenue and customers. At the end of the third quarter, the company had 13.8 million broadband customers, 62.9 million access lines and 67.3 million wireless customers. The company also had $30.1 billion in revenue at the end of the third quarter. Yesterday, AT&T was quick to point out that its high-speed-Internet business and its landline phone business make up no more than 20% of its annual revenue for the entire company. Those two segments were already declining, as customers disconnect landlines and switch to phone service from Internet phone or cable companies, and the broadband market overall has experienced slow growth in recent quarters. Craig Moffett, a telecom analyst at Sanford C. Bernstein & Co., said that, traditionally, in hard economic times, customers wouldn't think of cutting off their landline service. Wireless phones are now indispensable, but he said even cellphone bills may start to go unpaid if the economy worsens.
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