A preview of AT&T's Q3 earnings set to be announced this week doesn't offer many surprises. While AT&T expects positive gains on the wireless side buoyed by strong sales of the iPhone, a report in the Wall Street Journal says that the ILEC's wireline business continues to suffer as more consumers turn off their landline phones in favor of cell phones and switching to cable for their phone service.
According to BMO Capital Markets, AT&T's wireline revenue will decline 6.1 percent in the third quarter, which is not much of a change from what was seen in the second quarter. Not surprisingly, the one area where AT&T is taking its biggest hit is traditional telephone services. As of the end of Q2 09, AT&T had 49.4 million phone lines. BMO expects that figure to fall to about 47.9 million by the end of the third quarter.
Not all is lost on the wireline side, however. In addition to upgrading its wireless network, AT&T will continue to invest in expanding its U-Verse video network. Industry reports predict that AT&T will add around 250,000 U-Verse customers, bringing its total subscriber number to about 1.9 million.
- Wall Street Journal has this article
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