The Dow Jones Industrials (DJINDICES:^DJI) has enjoyed earnings season so far, and positive news on the earnings front played an important role in the index's gain of 104 points as of 12:30 p.m. EDT Tuesday. AT&T (NYSE:T) is slated to offer its quarterly report after the market closes this afternoon, making it the first Dow telecom stock to add its view to the overall picture of how the U.S. economy fared at the beginning of 2014. What it says will affect not just rival Dow component Verizon (NYSE:VZ) but also the broader telecom industry.

AT&T's previous quarterly report came just a single minute after the 4 p.m. market close. The telecom will follow up its earnings release with a conference call scheduled to begin at 4:30 p.m. EDT.

The prospect of a potential price war is foremost on AT&T investors' minds, as the company has seen direct attacks from up-and-comer T-Mobile (NASDAQ:TMUS) in recent months. Although T-Mobile's efforts represent an equal competitive threat to Verizon, the fact that T-Mobile has called out AT&T specifically in many of its ads points to the latter's perceived vulnerability among customers. In response, AT&T has had to offer some promotions of its own. While investors hope the moves could actually draw customers away from T-Mobile, the more likely result is that AT&T will have to spend more to retain its own subscribers, narrowing margins and hurting earnings results.

Source: AT&T.

More broadly, AT&T has some tough strategic decisions to make. On one hand, offering broadband Internet and online video could be a smart way to go beyond traditional and wireless telephony to gain greater penetration into American households. On the other, trends away from smartphone subsidies could represent a massive change for AT&T's revenue stream, offering opportunities for greater profit but also forcing the company to make the case to customers that its services are superior to Verizon, T-Mobile, and other players in the U.S. mobile industry. And lastly, discussion of potential international expansion has been going on for years, but so far AT&T hasn't revealed any big strategic plan to move beyond U.S. borders.

Watchers of the Dow Jones Industrials should keep their eyes on AT&T's report this afternoon. By itself, the telecom's low share price won't directly move the Dow substantially. But its collateral impact could have dramatic consequences for the blue-chip index, and AT&T needs to demonstrate its ability to grow in an increasingly competitive market if it wants to sustain its leadership role in the Dow.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.