Leading telecom giant
) entered into a wireline contract negotiation deal with the
Communications Workers of America (CWA) District 6. The contract
will span over four years from April 7, 2013 to April 8, 2017.
The current contract - shared between the two parties - will come
to an end on April 6, 2013.
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Per the tentative agreement, there will be a general wage
increment every year - 2.25% in the first, 2.5% in the second,
2.75% in the third, and 3% in the last. The deal also covers the
scope of 1% pension band hike for each year for most employees.
Additionally, there is an expansion plan for additional employees
with a guaranteed job proposal that provides a definite job
opportunity with AT&T. Almost 20,000 wireline employees
spreading across Arkansas, Kansas, Missouri, Oklahoma and Texas
come under the contract.
In the coming days, the deal will be put forward for an approval
voting by the CWA members. A bonus of $1,000 will be handed over
to each eligible employee if the agreement is approved on or
before January 31, 2013.
Earlier in August, the CWA ratified three-year contracts for the
AT&T wireline employees and the Midwest region. In December,
a three-year contract for the Southeast region was also approved.
On a collective basis, nearly 40,000 AT&T wireline employees
are under these ratified agreements.
We maintain our long-term Neutral recommendation on AT&T -
the second largest provider of wireless services in North America
). The company, currently, retains a Zacks #3 Rank, implying a
short-term Hold rating on the stock.
We believe that AT&T's growth prospects are strong driven by
subscriber accretion, higher smartphones adoption, Long-term
Evolution mobile broadband network, iPhone sales and U-verse
expansion. However, persistent access line losses, competitive
pressures and heavy iPhone subsidies might drag near-term margins