AT&T, Verizon strike worries do not concern Wall Street

Both AT&T (NYSE: T) and Verizon (NYSE: VZ) currently have thousands of workers working without contracts while company management and labor unions attempt to negotiate a resolution to contract disputes. Interestingly, both companies' stock prices are fairly stable and investors seem unconcerned about the threat of a strike.

This scenario is strikingly different from 2000 when Verizon saw its stock fall 11 percent as more than 80,000 workers walked out for more than two weeks, according to a Bloomberg report. 

What has changed over the past 15 years is that Verizon now only gets 29 percent of its revenue from its wireline division, compared to 67 percent in 2000, according to Bloomberg. And AT&T receives just 43 percent of its revenue from its wireline division compared to 77 percent in 2000.

The lack of attention by investors doesn't help the labor unions in their battle. In fact, some experts speculate that as the networks become based more on software and less on infrastructure, labor unions will lose their power. "As hardware becomes more software-intensive, unions are losing their power," said John Butler, senior analyst for Telecommunications Services & Equipment at Bloomberg Intelligence in the Bloomberg report. "They're getting displaced by software and by the slow disappearance of wireline services."

Last week AT&T Southeast workers represented by the Communications Workers of America (CWA) union voted to authorize a strike days before the current contract expired. The workers are currently working without a contract.  A big area of contention for the CWA is the AT&T's healthcare plan, which the union calls "substandard."

Likewise, Verizon has about 38,000 union wireline employees currently working without a contract since Aug. 1 while it negotiates with the CWA and the IBEW.

For more:
- See this Bloomberg article

Related articles:
AT&T Southeast CWA workers approve strike on eve of expiring labor contract
AT&T, CWA begin negotiations for 27,000 Southeast employees
AT&T, CWA reach tentative wireline labor agreement
Verizon's CWA union members to release results of strike vote at upcoming rally

Suggested Articles

Microsoft does not report exact revenue amounts for Azure, but it said Azure revenue grew 64% in the latest quarter compared to the previous year.

U.K. broadband provider CityFibre is targeting 14 more cities for its all-fiber gigabit service.

While Cisco has embraced the concept of disaggregation, service providers need to carefully consider how they will implement it.