S&P Wonders How Long U.S. Telecom Companies Can Maintain Current Dividends

Standard & Poors believes many U.S. telecommunications companies, traditional wireline
companies in particular, face industry trends that will ultimately hurt free operating cash flow generation and could make it challenging to maintain their aggressive financial policies.


"Returning cash to shareholders through dividends and share buybacks and the pressure to satisfy equity investors lessens their ability to pay back debt and maintain or reduce leverage," said Standard & Poor's credit analyst Allyn Arden. 


"These companies may need to adopt more conservative financial policies and reduce leverage to be able to maintain their current ratings down the line," Arden warns.