AT&T isn’t immune to the global credit problems, even though it generates over a billion in cash each month. Banks are limiting their lending to short term commercial paper for the giant teleco, according to its Chairman and CEO Randall Stephenson. As a result the company will be much more cautious with how it invests in the future.
Stephenson doesn’t say where the cuts will come, though he mentioned these problems at the opening of a call centre in North Carolina, which brought 400 jobs back to the U.S. from India. Is he foreshadowing that the company won’t open more call centres like this? Or, perhaps more scarily, will the company have to slow down rolling out its 3G coverage? iPhone owners across the nation, begin howling.
AP: ”Your ability to plan for investment is obviously affected. You kind of don’t know what your cost of capital six months from now is going to be,” Mr. Stephenson told the news service. ”We’ll just be very guarded, cautious in terms of where we invest, very guarded and cautious in terms of hiring and capital spending. We’ll see where this situation goes.”
AT&T has strong cash flow, which makes it less reliant on debt. But it’s also paying for some big acquisitions of wireless spectrum this year. It had winning bids worth $6.6 billion in the latest auction by the Federal Communications Commission. By comparison, it had $1.6 billion in cash at the end of June.
UPDATE: AT&T wrote us claiming it is not having trouble accessing money saying, “We are having no issues accessing various terms (1 week, 2 week, 3 week, month) and we are getting reasonable rates. There were a couple days last week where access was limited to overnight, but that was brief, and was at the time when the market was at its tightest.”
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