Credit Suisse analyst Paul Silverstein downgraded his rating on Cisco Systems from buy to neutral this week, writing that some major carriers may reduce their planned 2008 capital spending, and that carriers' wireline-related spending for the year potential could grow at the slowest pace in the past five years.
Silverstein wrote in a research note for clients that Credit Suisse was most concerned about a possible change in spending by AT&T, because so many suppliers to the giant telco could be affected. AT&T has said nothing about spending changes thus far. The company is due to report second quarter earnings next week.
Fortune reports that Silverstein write in a companion report that some major telcos in the U.S. and Europe will increase non-wireless network spending by only 6.7%, the lowest growth rate in five years and well below the 15.9% spending growth by these companies last year.
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