Rural telco Citizens counters AT&T ’s economic warning

Citizens Communications is not seeing the same economic “softness” in residential markets that AT&T reported yesterday, according to Maggie Wilderotter, Citizens’ chief executive officer, who spoke late yesterday at the same investor conference.

AT&T’s CEO Randall Stephenson said yesterday the company was seeing an increase in disconnects due to non-paying residential customers, which he attributed to an overall downturn in consumer markets. The news sent AT&T’s stock down yesterday along with much of the market.

Speaking a few hours afterward, Wilderotter paused to address what she called “the elephant in the room,” referring to Stephenson’s comments.

“From Citizens’ perspective, we’ve not seen the softness he talked about,” she said, adding that the company’s residential voice and broadband business performed strongly in the fourth quarter and that non-paid disconnects were actually down sequentially in the quarter.

“Just because it goes that way for AT&T, it doesn’t necessarily go that way for everybody else in the sector,” she said.

Citizens serves a more rural market than AT&T, and it focuses more on reacting to economic trends than trying to predict them, she said. But she expressed confidence that Citizens’ residential business could whether an economic downturn, arguing that voice, broadband and television service are the last ones consumers look to cancel in order to cut costs.

“When things get tough, people stay home more and use more services that are in the home,” she said, adding, “Broadband has never been through an economic recession, so it’s hard to predict.”