AT&T, Verizon Make Different Calls

As the recession speeds the decline of the traditional phone business, AT&T and Verizon are pursuing different strategies as they try to outflank one another. AT&T is staking its growth largely on the wireless market by aggressively marketing high-end devices such as the iPhone, while Verizon is pushing premium television services to homeowners. Industry observers say it is too early to tell which strategy will pay more dividends. While AT&T has taken a conservative tack, Verizon's FiOS gambit has always been more of a risk financially because it will take time to generate healthy margins on the video business. FiOS is expected to generate positive cash flow for the first time in 2009. But long term, Verizon's ability to offer TV as part of a bundle of TV, phone and Internet services may give it a leg up in the battle against cable providers for customers.