Dialing Down Faith in Wireless

Stocks of both AT&T and Verizon have outperformed the broader market in recent months. Investors are betting that growth in wireless offsets the continuing secular decline of the wireline businesses. That's always been a risky play, given near-saturation of the wireless market combined with the recession-time appeal of cut-price deals introduced by rivals like Sprint. Now comes a sign that the downturn may be biting. A mostly positive report from J.P. Morgan Thursday, based on investor meetings with AT&T management, noted that AT&T had "seen some subscribers pricing down plans" in wireless. The report also added that "data growth has more than offset macro pressures." Data revenue increases have long offset weakness in wireless voice. (3/26)