Investors will be closely monitoring AT&T's ( T) first-quarter results Wednesday for evidence that the telecom giant has dodged the worst of the economic downturn.

The Dallas, Texas-based firm, which is a key indicator for the health of the telecom sector, has promised low-single digit revenue growth through 2009.

Earlier this year, AT&T's fourth-quarter revenue came in broadly in line with analysts' estimate, but the company took an earnings hit. Investors will be looking to see how the firm continues to exploit its exclusive deal to sell Apple's ( AAPL) iPhones in the U.S.

There is even a rumor that AT&T and its arch-rival Verizon ( VZ) will announce better first-quarter numbers than Wall Street is expecting.

Analysts polled by Thomson Reuters expect AT&T to report first-quarter revenue of $31 billion and earnings of 48 cents a share, although these numbers could come in higher thanks to solid wireless performance and strong video growth.

The company's CEO, Randall Stephenson, recently told the Wall Street Journal that AT&T plans to invest heavily in wireless, with two-thirds of the company's capital outlays in the next five years going to wireless-network investments and acquisitions.

"It's no surprise that AT&T is trying hard to get investors to focus on wireless rather than wireline," wrote Craig Moffett, senior analyst at Bernstein Research, in a note released Monday. AT&T's exclusive iPhone deal should help sustain the company's wireless momentum, he added, but warned that wireline continues to weigh heavily on the firm.

AT&T is expected to announce wireless net additions that are good but not great, according to Moffett, but access line losses in its wireline telecom business of around 12.7%.

Moffett thinks that AT&T could post earnings of 49 cents a share, but warns that the firm's enterprise business could be a bigger factor in its first-quarter results than wireless.

"Enterprise is a black box," he wrote. "No-one knows just how cyclical the cyclical enterprise segment will turn out to be."

AT&T's shares have fallen more than 11% this year, highlighting the uncertainty that has clouded the economy. Undeterred, the company, which competes with Sprint Nextel ( S), Verizon ( VZ) and Qwest Communications ( Q), continues to shift its focus from wireline to wireless.

The telecom giant, for example, is said to be in talks with Apple to extend its iPhone deal until 2011.