AT&T spending reduction hitting Cisco

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Talk of AT&T cutting back on its capital expenditures for this year have hit Cisco’s stock as well as the prospects for other telecom equipment vendors. Credit Suisse this week downgraded Cisco to neutral from outperform on reports that AT&T will cut back on its 2008 capex budget. Credit Suisse estimates that AT&T spends between $500 million and $1 billion annually with Cisco, or almost 2.5% of Cisco’s annual revenue.

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