(Reuters) – Shares of AT&T rose 5% in premarket trading on Wednesday after the telecom company said lead cables made up only a small part of its wireline network, easing fears of an expensive clean-up.
Rival Verizon also rose by a similar margin, helping the companies rebound from a selloff sparked by a Wall Street Journal report on July 9 that several telecoms giants abandoned a sprawling network of underground toxic lead cables.
Several brokerages including J.P. Morgan and Citi had downgraded AT&T after the report, which said the cables may have contaminated neighboring soil and drinking water sources.
AT&T said on Tuesday lead-clad cables “represent less than 10% of its copper footprint of roughly two million sheath miles of cable, the overwhelming majority of which remains in active service.”
The company added that more than two-thirds of its lead-clad cabling “is either buried or in conduit, followed by aerial cable, and with a very small portion running underwater.”
Verizon did not immediately respond to a request for comment.
AT&T shares have fallen about 14% since the WSJ report and hit a three-decade low on Monday, while Verizon has lost about 10%. AT&T is scheduled to report its second-quarter results next Wednesday.
(Reporting by Samrhitha Arunasalam in Bengaluru; Editing by Anil D’Silva)
