AT&T May Keep Rural Landline Business

At a communications industry conference in New York today, AT&T Inc. (NYSE: T) chief Randall Stephenson may decide not to sell off the company’s rural wireline assets. That would be a big switch in plans for the company, which had previously said it was considering the sale of the rural lines.

A lot may depend on whether AT&T succeeds in winning an auction for a block of spectrum on offer from Verizon Wireless, a joint venture of Verizon Communications Inc. (NYSE: VZ) and Vodafone plc (NASDAQ: VOD). MarketWatch reports that Stephenson said that the company has a “line of sight for a broadband solution” involving its wireline operations that are not covered by the company’s U-verse television and broadband service. Stephenson also said the company would provide details of its plans on November 7th.

Stephensen, still smarting from federal regulators’ denial of AT&T’s offer to take over T-Mobile USA, continues to rail against regulatory hurdles to selling the rural lines. He said that the telecom industry wants more consolidation but that a “lack of clarity” prevents the bigger fish from swallowing the smaller ones.

He also hinted at a next-generation version of LTE that would allow wireless service to replace wireline service in rural areas. Stephenson said:

LTE can become a fixed-line replacement or even better than what you get from fixed line.

However AT&T wouldn’t support both at the same time, as regulators now require. On that issue he certainly has a valid point. High-speed, broadband, wireless service to rural parts of the U.S. may not put a lot of money cash in Ma Bell’s pockets, but the company’s customers would be very happy indeed.

Stephenson also said that the company still expects to sell 25 million smartphones in 2012, a number about equal to last year’s sales.

Share of AT&T are up about 0.4% at $37.81 in a 52-week range of $27.41 to $38.28.

Paul Ausick