Uncommon Wisdom

Jan 8 2009   8:52PM GMT

Slower U.S. service provider revenue expected; unclear on spending

Tom Nolle Tom Nolle Profile: Tom Nolle

Wall Street is now expecting the U.S. telcos to face much slower growth in 2009, with revenues barely up over 2008, and has thus revised the stock price targets for giants AT&T and Verizon.

We agree that at the revenue level, there will be few bright spots for service providers in 2009 in the U.S. or anywhere else, but the real question is whether the decline in revenue will impact their spending plans.

Even without broadband stimulation from the Obama administration, we believe that U.S. operators would not cut broadband deployment at all and would likely make only modest deferrals in projects. Even now, we have still not had a conclusive statement of a budget cut from any Tier One.

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