Slow Revenue Growth, Cost-Cutting and Labor Difficulties, and Increased Competition Plaguing Wireline Telecom Companies, Says S&

Slow Revenue Growth, Cost-Cutting and Labor Difficulties, and
Increased Competition Plaguing Wireline Telecom Companies, Says S&P Equity
Research
Longer-term Forecast More Optimistic 


NEW YORK, Aug. 26  /PRNewswire/ -- Facing increased competition and sluggish
revenue growth, wireline telecommunications carriers will be continue to be
challenged in their cost-reduction efforts, and labor-related issues will
increase throughout 2004, says Standard & Poor's Equity Research in a
semiannual study of the industry.  The survey, Industry Survey on
Telecommunications: Wireline, is published twice yearly by Standard & Poor's,
the leading provider of independent investment research, ratings and indices.

"We expect wireline telecom companies' difficulties to continue through the
remainder of 2004," says Todd Rosenbluth, Integrated Telecommunications
Services Equity Analyst with Standard & Poor's Equity Research Services and
author of the report.  "The regional Bells should see access line declines of
at least 4%, as wireless, cable, and Internet telephony make greater inroads
into U.S. households.  Also, with the Bells having entered long-distance
markets, pricing pressures are not likely to ease."

"Although the present environment is contentious, we believe that the Baby
Bells are well positioned to remain among the leading forces in the industry
for years to come, due to the strengths of their existing customer
relationships and their network quality," We also expect that the telecom
carriers will benefit from their wireless and broadband offerings," continues
Rosenbluth.

Standard & Poor's Equity Research Services holds a positive outlook on the
Integrated Telecommunications Services (wireline) sub-industry.  Year to date
through August 20, the wireline carriers were up 0.3%, versus a 1.0% decline in
the S&P 1500 Index. The telecom services sector has tended to be a strong
performer as economic expansions mature with the recovery of business spending.

"In recent months, dividends and free cash flow growth have moved into the
spotlight, with some carriers establishing relatively large dividend payouts.
With a more defensive view toward U.S. equities, Standard & Poor's believes
investors should focus on integrated telecoms that have consolidated revenue
and earnings growth to support capital spending as well as dividend increases,"
concludes Rosenbluth.

Standard & Poor's Industry Survey on Telecommunications: Wireline looks at the
issues affecting the main segments of the industry.  These include competition
from cable and wireless providers, the eroding difference between local and
long-distance carriers, continued Merger and acquisition activity, and labor
issues.  In addition there is a look at key players in the wireline
telecommunications industry such as AT&T (NYSE:T), SBC Communications (NYSE:
SBC), and Verizon (NYSE:VZ).

About Standard & Poor's Industry Surveys

Industry Survey on Telecommunications: Wireline is part of the Standard &
Poor's Industry Surveys series, produced by its senior equity analysts, that
keeps a watchful eye on 52 U.S. industries, offering insights into trends and
conditions that affect leading companies' market performance.  Covering 1,500
U.S. stocks, Standard & Poor's equity analysts have the largest U.S.-based
equity research coverage.

Standard & Poor's Industry Surveys provide a broad and fundamental overview of
each industry's structure, its recent performance, and an analysis of trends
that will influence it in the future.  Each survey is organized into the
following sections: Current Environment, Industry Profile/Industry Trends, How
the Industry Operates, Key Industry Ratios and Statistics, How to Analyze a
Company, Industry References, Comparative Company Analysis, and a Glossary of
terms used in that industry.  Both text and data are provided, as are
references to additional sources of industry information.  Two surveys on each
industry are published each year.

Readers can purchase Standard & Poor's Industry Surveys three ways:

Online for immediate download at http://sandp.ecnext.com/ , by telephone at
800-221-5277, or via e-mail order sent to . Members of the media can request a
copy from the communications contact listed at the end of this release.  To
view a video clip of Standard & Poor's equity analyst Todd Rosenbluth
discussing the sector, go to http://www.standardandpoors.com/industrysurveys
(Viewing the video clip requires Windows Media Player capability).

About Standard & Poor's

Standard & Poor's, a division of The McGraw-Hill Companies (NYSE:MHP), is the
foremost provider of independent credit ratings, indices, risk evaluation,
investment research, data and valuations.  With 5,000 employees located in 20
countries, Standard & Poor's is an essential part of the world's financial
infrastructure and has played a leading role for more than 140 years in
providing investors with the independent benchmarks they need to feel more
confident about their investment and financial decisions.  For more
information, visit http://www.standardandpoors.com/.

The analyst quoted above is a Standard & Poor's equity analyst. He has no
affiliation with any company he covers, nor any ownership interest in any
company he covers.  Affiliates of Standard & Poor's Securities, Inc. (SPSI)
received non-investment banking compensation from AT&T, SBC, and Verizon during
the past 12 months.  AT&T Corp. is a client of SPSI and during the past 12
months, SPSI received compensation from this company for the provision of
brokerage execution services.

The equity research reports and recommendations provided by Standard & Poor's
Equity Research Services are prepared separately from any other analytic
activity of Standard & Poor's.  In this regard, Standard & Poor's Equity
Research Services has no access to non-public information received by other
units of Standard & Poor's.  Standard & Poor's does not trade for its own
account.

   For further information contact:

   John Piecuch
   Communications Manager
   Standard & Poor's
   Tel.:  [phone]
   

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