Summary
1. We have been saying for some time that the RBOCs are going to become much smaller entities not just from “losing wireline voice customers,” but from ultimately selling off substantial amounts of landline assets. 2. This second important reason appears to be ignored by the analyst in the source article. 3. In particular, we have talked about a much smaller Verizon company, with the potential for significantly higher margins.
Analysis
Every once in a while, consultants announce what they deem to be revelations in the telecom industry. It is as if they have just woken up and discovered trends that have been obvious for a long while. That is why they will use extravagant expressions such as “born again” and “radical.” For had they been paying attention and had they a much greater closeness to the industry shifts occurring in the past, the overall amount of change would not seem that dramatic to them.
The actual transformation going on with the RBOCs has been at a more deliberate pace than is recognized by some of these market observers. Further conversion in the future will likewise be more measured than suggested in the source article. The idea that “Verizon is almost done” in “finish[ing] this process is comical. In addition, the notion that the RBOCs “are very different competitors for the service bundle than in areas where those advanced networks are still not available and may not be deployed” is inherently clear.
