DALLAS (

TheStreet

) --

AT&T

(T) - Get AT&T Inc. Report

is being placed on credit watch negative by ratings agency Standard & Poor's, raising the possibility of a credit downgrade for the company.

The telecom giant, which is locked in a battle with

Verizon

(VZ) - Get Verizon Communications Inc. Report

, announced S&P's decision in a statement released late Tuesday. The ratings agency has not informed AT&T when the notice will be issued.

The move could signal a possible downgrade from AT&T's current A credit rating, although investors largely shrugged off S&P's decision in early Wednesday trading. AT&T's stock was up 11 cents, or 0.42%, to $26.26 shortly after market open, despite a dip in tech stocks that saw the Nasdaq slip 0.09%.

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AT&T recently grew its second-quarter profit by almost 26%, boosted by booming demand for the

Apple

(AAPL) - Get Apple Inc. (AAPL) Report

iPhone

.

iPhone Arch Rivals: AT&T vs. Verizon>>

A major question mark, however, still hangs over Apple's long-term iPhone plans, and there have been increasing calls for Apple to offer a CDMA version of the iPhone capable of running on Verizon's network. AT&T has been Apple's sole U.S. iPhone partner since the phone's launch in 2007, so extending the device to the telco's chief rival could have a major impact on AT&T.

-- Reported by James Rogers in New York

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