| • Competition: Competition is expected to intensify in the wireless segment. The Company's wireline business faces competition from competitive local exchange carriers, wireless carriers, long distance providers, and cable operators.
• Loss of iPhone Exclusivity: AT&T may lose iPhone exclusivity in 2011, which will impact the Company’s subscriber base, thereby hurting revenue.
• Employee Problems: Pension benefits expense continues to affect the Company’s earnings. Roughly two-thirds of the Company’s total employees are represented by Communications Workers of America (CWA) and International Brotherhood of Electrical Workers (IBEW).
• High Capital Spending: AT&T is expected to make huge capital investments to convert the wireless network assets from Verizon’s (VZ) CDMA network platform to its own GSM technology.
• Risk Related to T-Mobile Merger: AT&T might have to pay a breakup fee of $3 billion to the German company, if the deal fails. In addition, AT&T will be liable for $750 million of license fees and additional roaming rights.
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