AT&T sees economy recovering in 2nd half

By Ritsuko Ando

NEW YORK (Reuters) - AT&T Inc (T.N) Chief Financial Officer Rick Lindner said on Thursday he sees the U.S economy improving in the second half of the year, with recovery likely led by the business sector rather than by consumers.

The executive from the top U.S. phone company said consumers will likely need more time to work through mortgage and housing problems, although AT&T is generally more resilient than others in retaining customers in an economic downturn.

"I think we'll see some improvement in the second half," Lindner told the Reuters Global Technology, Media and Telecoms Summit in New York. "I think it will be maybe more business-related than consumer."

"My sense, my gut feel, is that because of oil prices, because of mortgage issues and real estate, it will take a little bit longer to work through the consumer impacts," he said.

AT&T's quarterly profit rose more than 20 percent in the first quarter from a year before, helped by strength in its wireless business, but traditional phone subscribers fell heavily.

Lindner said that the decline was mainly due to consumers shifting to wireless, although a weaker economy and other factors may be contributing to the trend.

"Wireless does not seem to show an impact at this point," he said, when asked whether a weaker economy could hit AT&T's main growth engine. The company's wireless revenue rose 18 percent year-on-year in the first quarter.

Lindner also said that AT&T's plans to roll out its high-speed Internet and video service called U-verse are on target despite worries about mortgage and housing problems.