Wireline erosion muddies AT&T, Verizon picture
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Both AT&T and Verizon met Wall Street expectations with their first-quarter earnings, and neither reported any distressing impact of a slowing economy, leading to a general consensus that both had posted strong quarters.
Craig Moffett, analyst for Sanford C. Bernstein, sees reason for concern at both companies, however, given the deterioration of wireline revenues. Even AT&T, which added 491,000 broadband customers in Q1 — up from 396,000 in Q4 despite a price increase — should be concerned that consumers cutting the cord now may not come back, he said. At Verizon, the bad news included anemic net DSL adds and extended to Verizon Business, where growth has slowed, at least for this quarter.
| AT&T | Verizon | |
|---|---|---|
| Earnings per share | $0.74 | $0.61 |
| Wireless subscriber adds | 1.3 million | 1.5 million |
| Wireline access lines lost | 1.16 million | 920,000 |
| Total broadband connections | 14.6 million | 8.5 million |
| Consumer broadband adds | 491,000 | 266,000 |
| Video service subscribers | *379,000 | 1.2 million |
| Net DSL adds | ** | 4000 |
| Enterprise revenue growth | 1.2% | 0.4% |
| *AT&T U-verse and Verizon FiOS (does not include resale of DBS services) **AT&T doesn't break down its individual service numbers |
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