Rich Fiscus
20 Jul 2007 21:44
When AT&T Inc. and Verizon Communications Inc. report quarterly results later this month, investors will be looking for proof that their expensive video strategies are starting to pay off.
The two companies have spent billions building high speed networks designed to compete with cable companies' all-in-one video, internet, and phone packages. These networks are seen by many as key to the success of traditional telephone providers, largely due to declining fixed-line phone sales and increasing competition from cable and online services.
For the traditional 13-state territory of AT&T, the company has said it plans to connect the network to around 18 million homes by the end of 2008.
AT&T shares have risen less than 1 percent in the past 3 months to trade on Friday around $39.30. Verizon shares have risen 13 percent over the same period to around $42.45.
"As they begin delivering on the metrics and people can see the product out there in the market, there will be less of a concern about the spending," said Atlantic Equity analyst Chris Watts, adding that positive consumer reaction to Verizon's FiOS video service over the past year was already helping that company's shares.
Source: Reuters