Ovum analyst Ron Klein says a potential strike by the Communications Workers of America (CWA) wouldn't affect AT&T's short term capital expenditures. If anything, AT&T will likely press to reduce health care costs given the current state of the economy.
The CWA is the largest labor union within AT&T, representing around 110,000 workers. Current contract negotiations are the first in five years and the first since the mergers of AT&T, BellSouth, and SBC. Klein says the balance of power has "shifted" to the company this time around, and management employees on the wireless side have been trained to fill in should a strike occur.
Regardless of any work stoppage, Ovum believes AT&T optical spending will be lower in the first half of 2009 than the first half of 2008; the company had already started pulling back optical spend in the second half of 2008.
However, a prolonged (more than 3 months) work stoppage could be "more harmful" to optical vendors and AT&T's wireline vendors, including Alcatel-Lucent, Cisco, Ciena, Fujitsu, Juniper and Nokia Siemens Networks. A longer strike could also hurt enterprise sales because AT&T would have difficulty providing competitive responses and completing installations in a timely fashion.
- Ovum predicts AT&T capex spend will go on. Post.
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