Wireless riding out financial meltdown : Carrier execs express optimism

The wireless industry seems to have weathered Wall Street’s troubles relatively well – at least, so far. In comments last week, executives from two of the nation’s largest wireless carriers said the ongoing economic turmoil in the financial-services industry has so far left them relatively unscathed.
Macro-economic pressures haven’t weighed on Sprint Nextel Corp.’s consumer business, said Chief Executive Dan Hesse Thursday, according to a Dow Jones report. However, the nation’s No. 3 carrier has seen an unspecified decline in sales to corporate buyers, he said.
Verizon Communications Inc.’s Denny Strigl made similar comments the same day, according to Dow Jones. Strigl, currently COO of Verizon and former head of Verizon Wireless, said the carrier has only seen a minor impact from the troubles on Wall Street. He said the financial-services industry doesn’t contribute a significant amount of revenue to the carrier.
The same appears largely true in Europe. According to research firm Ovum, it’s business as usual for that region’s mobile operators. Carriers there have continued to grow their revenues, with the economic downturn having little impact.
Such comments are bourn out in the RCR Wireless News Stock Watch. The index, which tracks public companies in the wireless industry, has seen a slight decline during the past month, from around 3,250 points at the beginning of the month to around 3,000 today. The chart’s path mirrors similar action on the New York Stock Exchange and Nasdaq, though to a lesser degree. The NYSE started the month at around 8,250 points and dipped below 7,500 last week before rallying past 8,000 today.
However, the ride isn’t over yet, and wireless may still see some kind of effect from the waves on Wall Street. Congress is currently debating the Bush administration’s proposal for an unprecedented $700 billion bailout of the financial industry.
“After more than a year of incrementalism, Washington seems likely to embrace a ‘big bang’ approach to restoring market liquidity with an eye toward stabilizing the U.S. economy and restoring investor confidence,” Lehman Bros. wrote in a research note this morning. “Developments late last week point to enactment by early October, at the latest, of a mostly bipartisan plan to buy, warehouse and hold for later sale nonperforming loans and other assets held by several U.S. financial institutions.”
The paragraph was the only item in today’s note from Lehman. The firm filed for bankruptcy a week ago.