Banc of America keeps its market perform rating on SBC Communications (SBC).
Analyst David Barden says consistent with earlier comments, SBC slashed its 2003 capital spending and headcount. At this point, ahead of third-quarter results, it is unclear whether the company is being proactive, or reactive to an environment that is shaping up to be worse than anticipated. Barden now expects $7 billion capital spending in 2002 vs. the $7.8 billion estimate and cutting the 2003 spending estimate to $5.5 billion.
While the company's competition has made good on promises to bring lower prices to consumer via UNE-P, the company now is making good on threats that current wholesale pricing will not support ongoing investment in infrastructure or service quality improvements.