The U.S. telecommunications industry is experiencing a volatile period following a detailed investigation conducted by the Wall Street Journal revealing that telecom companies, such as AT&T Inc. (NYSE:T), Verizon Communications Inc. (NYSE:VZ), Telephone and Data Systems Inc. (NYSE:TDS), Frontier Communications Parent Inc. (NASDAQ:FYBR) and others neglected more than 2,000 lead-containing cables across the country that were installed under the old Bell System and are now decaying.
Environmental researchers, collaborating with Journal reporters, conducted tests on water and sediment samples from various locations. Shockingly, eight out of 12 tests showed elevated levels of lead contamination.
The market impact was swift and severe. Analysts, including Citigroup’s Michael Rollins, wasted no time downgrading the affected stocks due to the environmental threat.
On Monday, shares of AT&T plummeted to their lowest value since 1993, dropping 7%. Although there was a slight recovery attempt on Tuesday’s opening, AT&T ultimately closed flat.
Verizon shares also experienced a significant decline, hitting their lowest point in over a decade on Monday with a 7.5% drop, followed by a marginal 2.4% rebound on Tuesday. TDS saw the most notable recovery on Tuesday, surging 9% after an 8.4% decline on Monday.
In response to the Wall Street Journal’s investigation, the telecom companies and USTelecom, a group representing the broader industry, defended their practices.
They emphasized that they provide safety training and protective gear to workers to handle lead properly.
AT&T said in a press release that it does not consider lead-sheathed cables to be a public health concern, citing scientific literature. The company also criticized the testing methodologies used by the newspaper and questioned the credibility of one of the testing companies due to a conflict of interest.
TDS acknowledged the presence of a limited amount of lead cabling in its network and said it is identifying the next steps to address the issue while complying with applicable laws. Verizon did not issue a PR on the matter.
Among the exchange-traded funds that show a concentration of holdings in telecommunication stocks affected by the lead-cabling crisis, Zenger News found:
© 2023 Zenger News.com. Zenger News does not provide investment advice. All rights reserved.
Produced in association with Benzinga
Edited by Arnab Nandy
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