Wireline Concerns For Verizon (VZ)

Analysts at Auriga have reiterated a Hold for Verizon Inc. (NYSE: VZ) with a price target of $31. Verizon is expected to reduce capital expenditure on FiOs in 2010 by $1.5 billion.

It will, however, have to increase capital expenditure on 4G technologies. However, this amount is expected to be less than $1.5 billion. Capital intensity for Long Term Evolution (LTE) is also expected to be lower than anticipated and the early focus of LTE would be to grab incremental high valued data customers. The enterprise portion of the wireline business is expected to start picking up due to improved economic conditions in 2010. However, the consumer side of the wireline business continues to be under severe pressure and leading to headcount reductions.