AT&T (NYSE:T) is about to release earnings. Follow this Bear Case Scenario as you ponder management comments.
A much too large portion of revenue and cash flow comes from fixed-line local and long-distance phone services. These business remain under severe attack from competitors, Telco wannabees and technological substitution. This business will continue to shrivel.
AT&T’s is very heavy reliant on the iPhone. Half of its retail customers use the device. AT&T shells out large subsidies for each new iPhone model. How long can this continue before it bits shareholders.
Local network upgrade runs the very serious risk of leave the firm with too little capacity to offer the data speeds customers increasingly desire.
George Gutowski writes from a caveat emptor perspective.