Reply #10: ATT braces for more hangups [View All]

[ozymandius]

The pinch on consumer spending continues to cause big hangups at phone companies where their core businesses — landline telephone service — is eroding faster than ever.

The latest round in the alarming decline in phone lines will come Tuesday morning, when AT&T (T) presents its first-quarter earnings. Analysts are expecting AT&T — No.10 on the Fortune 500 list — to report that the rate of line losses in Q1 exceeded the 8% hit it took last year. No. 2 telco Verizon (VZ) has an even higher cancellation rate, losing 8.1% of its lines last year compared with a 7.6% decline in 2006.

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AT&T’s so-called landline business accounts for about 59% of total revenue and about 55% of its profits. With the number of lines falling, AT&T has had to trim costs to keep in pace. Last week AT&T said it was cutting about 4,650 employees, or 1.5% of its staff in a “streamlining” effort.

http://techland.blogs.fortune.cnn.com/2008/04/21/att-shrinkage-report-on-deck/