Analyst: Verizon's outlook is "nothing short of dismal."

http://money.cnn.com/2008/04/04/tech.../index.htm?pos
tversion=2008040414

Last Updated: April 4, 2008: 2:34 PM EDTVerizon's tough call
The No. 2 wireless carrier desperately needs new revenue streams to offset
declines in its core home phone business.
By Scott Moritz, writer
NEW YORK (Fortune) -- Verizon Wireless scored a major coup recently when it
agreed to pay nearly $9.4 billion for wireless spectrum to build what could
be the country's largest and fastest cellphone network. In a victory lap of
sorts, Verizon executives on Friday hosted a conference call during which
they predicted the network would blanket the nation in two years and
boasted of the huge revenue opportunity for years to come.

CEO Ivan Seidenburg went so far as to call the company's ambitious plans
for the newly-acquired 700 megahertz radio waves "transformative."

Let's hope so. Verizon's (VZ, Fortune 500) warm and fuzzy forecast of a
gleaming future in wireless masks the cold reality facing the country's No.
2 wireless carrier: It's core business, landline phones, is slowly
disappearing and the amount of debt it's taking on to finance a 4G network,
as the next-generation of cellphone services are called, is rising fast.

Craig Moffett, an analyst with Bernstein Research, noted as much in a
message to investors on Friday. Timed to Verizon's presentation to analysts
on Friday, Moffett released a report in which he reminded investors that
the company's present outlook is "nothing short of dismal."

"Someday, Verizon will be all about wireless data [and] rule the roost in
wireless broadband," wrote Moffett. "Someday... but not today."

Specifically, Moffett noted, Verizon primary customer lines were cancelled
at a rate of 10.6% last year as more customers switched to cable or
wireless phone services. The pace of that decline is accelerating,
according to Moffett, who points out that Verizon's primary residential
phone lines have dropped by 27% since 2002.

Home phone service is still Verizon's biggest business, but it now accounts
for only 29% of sales, according to Moffett. Verizon reported revenues of
$93.5 billion in 2007.

Many customers are fleeing to cable companies like Comcast (CMCSA) and Time
Warner Cable (TWC), which have successfully bundled lower-cost video,
calling and Internet access services into single monthly packages. In
response, Verizon and AT&T (T, Fortune 500) are building expensive video
systems, but they're still losing customers by the thousands.

Wireless growth has long been Verizon's salvation in this downward trend.
The carrier has not only gained mobile phone users from the steady decline
in landline customers, it has also profited from the higher revenue
generated by wireless calls. That's because, unlike a conventional call
where customers pay only for the calls made, wireless carriers bill for
calls made and received.

Even so, wireless services alone won't completely offset the revenue
shortfall from fewer landline customers, which is why Verizon is investing
heavily in mobile data services like Web access, GPS navigation and e-mail.
What's more, Verizon is hoping that a joint venture with Vodafone (VOD)
will give it the global scale necessary to negotiate lower prices on
infrastructure and phones once it switches to a new wireless technology
known as long term evolution, or LTE.

The cost of building its 4G wireless broadband network will be staggering,
according to some analysts. Verizon isn't saying how much it plans to spend
building the network, but has estimated that its total capital investments
will be less than the $17.5 billion spent in 2007. That does not include
the $9.36 billion it now owes on the wireless spectrum licenses.

To be sure, Verizon doesn't have much trouble attracting fresh capital
these days. This week the company raised $4 billion from debt sales to help
pay for the wireless spectrum. This pushes Verizon's total debt to about
$35.1 billion. As investors have grown leery during the broader credit
crisis on Wall Street, Verizon may find it harder, and more expensive, to
secure additional funding in the future.

The big telco is in a tight spot. Wireless expansion is necessary to offset
its core declines, but the problem is that investors won't like the costs
or the deeper debts required to make it happen.

First Published: April 4, 2008: 2:18 PM EDT

So, this article says that Verizon Wireless, the cell phone company, is so
incredibly successful that it is propping up Verizon's wired landline
business; and that Verizon's management is betting the company's future on
Verizon Wireless rather than the wired landline business.

And this is supposed to news to anyone? Every wired landline business in
the world is sinking. Most wired landline companies saw the writing on
the wall two decades ago and got into the wireless business, some quite a
bit more successful that others.

Verizon is one of the companies which has been successful in its wireless
business, and it is investing heavily in that business (at the cost of
short-term profits), in order to stay successful.

The jury is out on the "new AT&T" (nee' Cingular) and AT&T Mobility. The
old AT&T got into wireless much the same way, by buying McCaw Cellular One
and rebranding it as "AT&T Wireless". Hopefully AT&T management has
studied that debacle, and taken effective measures to avoid repeating
those mistakes.

It is unclear what this analyst would like to see Verizon's management do.
Verizon has shed itself of legacy businesses such as IDEARC and Fairpoint,
and will probably continue to do so. But failing to invest aggressively
in its wireless network, although it may please short-term investers,
would be long-term suicide.

-- Mark --

http://staff.washington.edu/mrc
Science does not emerge from voting, party politics, or public debate.
Si vis pacem, para bellum.

tim@nowhere.com (Tim) wrote in news:20080405002827.A444B4E4B6
@outpost.zedz.net:

> Verizon is hoping that a joint venture with Vodafone (VOD)
> will give it the global scale necessary to negotiate lower prices on
> infrastructure and phones once it switches to a new wireless technology
> known as long term evolution, or LTE.
>

Oh, boy! Let's screw up another generation of data delivery with about 10
new, and of course completely incompatible, "systems" designed to prevent
churning so we can screw 'em with charges.

The Sellphone industry hasn't learned its lesson, yet......

But it's about to................................................ .Wimax

Mark Crispin wrote:

> So, this article says that Verizon Wireless, the cell phone company,
> is so incredibly successful that it is propping up Verizon's wired
> landline business; and that Verizon's management is betting the
> company's future on Verizon Wireless rather than the wired landline
> business.
>
> And this is supposed to news to anyone? Every wired landline
> business in the world is sinking. Most wired landline companies saw
> the writing on the wall two decades ago and got into the wireless
> business, some quite a bit more successful that others.
>
> Verizon is one of the companies which has been successful in its
> wireless business, and it is investing heavily in that business (at
> the cost of short-term profits), in order to stay successful.
>
> The jury is out on the "new AT&T" (nee' Cingular) and AT&T Mobility.
> The old AT&T got into wireless much the same way, by buying McCaw
> Cellular One and rebranding it as "AT&T Wireless". Hopefully AT&T
> management has studied that debacle, and taken effective measures to
> avoid repeating those mistakes.
>
> It is unclear what this analyst would like to see Verizon's
> management do. Verizon has shed itself of legacy businesses such as
> IDEARC and Fairpoint, and will probably continue to do so. But
> failing to invest aggressively in its wireless network, although it
> may please short-term investers, would be long-term suicide.
>
> -- Mark --

I met your mom and step dad(?) about 15 years ago in the Skamania Lodge
dining room. We were talking and she mentioned your name. I started
to chuckle and she asked if I knew you. I did not want to tell her
that you were a known troll from seattle.general. I was polite in
referencing you. She might've mentioned the conversation to you. I'm
sure that you know that your mom visited the Skamania Lodge around
1993-1994, so I am not making this up.

I hope that your mom is well. She sincerely seemed like a great lady.
If she is still around, ask her about the conversation. Tell your mom
that I said 'hi'.

I have not seen your name pop up on my screen in a while and I just
remembered meeting your mom.

It's a small world...
--

Larry wrote:
> But it's about to................................................ .Wimax

WiMAX.

Larry wrote:
> tim@nowhere.com (Tim) wrote in news:20080405002827.A444B4E4B6
> @outpost.zedz.net:
>
>> Verizon is hoping that a joint venture with Vodafone (VOD)
>> will give it the global scale necessary to negotiate lower prices on
>> infrastructure and phones once it switches to a new wireless technology
>> known as long term evolution, or LTE.
>>
>
> Oh, boy! Let's screw up another generation of data delivery with about 10
> new, and of course completely incompatible, "systems" designed to prevent
> churning so we can screw 'em with charges.
>
> The Sellphone industry hasn't learned its lesson, yet......
>
> But it's about to................................................ .Wimax
>

You really haven't been keeping up on things. This is only the latest in
a series of failures because it works about 5% as well as it was promoted.:


"Australia’s WiMAX pioneer, Buzz Broadband, closed its network, with the
operator’s CEO publicly calling the technology a “disaster” that “failed
miserably.”..."

http://www.electronista.com/articles....wimax.closed/

George <george@nospam.invalid> wrote in
news:XpCdndqGns5U9WranZ2dnUVZ_rOdnZ2d@comcast.com:

> Buzz Broadband

Here has been WiMax's problem. How much capital do you think "Buzz
Broadband" has? Can we count it on one hand?

The big boys have brought bags of cash to WiMax, now, and YOU haven't been
keeping up!

Nokia is in production of WiMax internet tablets. I doubt they intend
Wimax to die so this production will be wasted. Now owning over 40% of the
sellphone market of the world, Nokia can simply buy anything it wants from
petty cash.....including a WiMax network across the planet to put it on.

Larry wrote:
> The big boys have brought bags of cash to WiMax, now, and YOU haven't been
> keeping up!

True...Just as so many investors brought bags of cash to internet
startups ten years ago. Therefore using the amount of cash infused into
WiMax as a metric of it potential of success is flawed. Its not a
metric of its success yet as it hasn't been deployed in enough areas
to evaluate.

The failure of the Australian WiMax project has now moved to the
finger pointing stage, so we really don't have any tangible facts why
it allegedly failed.

At 05 Apr 2008 01:45:50 +0000 Larry wrote:

> > Verizon is hoping that a joint venture with Vodafone (VOD)
> > will give it the global scale necessary to negotiate lower prices on
> > infrastructure and phones once it switches to a new wireless technology
> > known as long term evolution, or LTE.
> >
>
> Oh, boy! Let's screw up another generation of data delivery with about
10
> new, and of course completely incompatible, "systems" designed to prevent
> churning so we can screw 'em with charges.


Actually, in this case, it's just the opposite- Verizon, the largest CDMA
carrier, is planning to adopt the same 4G system most GSM carriers plan to
adopt- we're actually coming full circle- interoperability beteen most, if
not all, carriers. European GSM 4G phones will be able to roam on Verizon,
and vice-versa.

> The Sellphone industry hasn't learned its lesson, yet......
>
> But it's about to................................................ .Wimax

*Sigh*... It's going to be like watching a six-year-old discover there's
no Santa Claus when you see WiMax deployed...

DTC <me@nothingtoseehere.zzx> wrote
> Larry wrote

>> The big boys have brought bags of cash to WiMax, now, and YOU haven't been keeping up!

> True...Just as so many investors brought bags of cash to internet startups ten years ago.

That isnt what happened.

> Therefore using the amount of cash infused into WiMax as a metric of it potential of success is flawed. Its not a
> metric of its success yet as it hasn't been deployed in enough areas to evaluate.

That last is a pig ignorant lie.

> The failure of the Australian WiMax project

And that is another lie. There is no such animal that has failed.

> has now moved to the finger pointing stage,

Yep, with a MUCH bigger broadband operation saying that
their WiMax using hardware from the same supplier works fine.

> so we really don't have any tangible facts why it allegedly failed.

Another lie. We do know that that clown that claims it doesnt work
'runs' a tiny little pimple on the bum of broadband in one particular
town and that Internode is a MUCH bigger national operation and
that Internode says that that clown hasnt got a ****ing clue about
how to implement a viable WiMax operation.

AND WiMax is an enhancement of wifi, which hordes use every single day too.