Vlad:
I think you hit the nail on the head: the local telcos, especially
the RBOC's and GTE, have millions of miles of copper and
fiber already in place and most of the stranded costs are already
paid off.
In my opinion, one of the best telco plays is SBC and its merger
with PAC should make it an even better play if and when it
goes through.
However, I think the telco arena is going to be cutthroat and
uncertain for the near future so last week, when they hit new
highs (since I've held them), I sold off my largest holdings: SBC
and PAC.
Just in case anybody thinks any telco is big enough to weather
the storm and be infallible: check out the Canadian deregulated
market of a couple of years ago--many telco companies were
driven into bankruptcy due to cutthroat pricing and some of the
biggest, including T at that time, opted to leave the Canadian
market rather than suffer the losses.
AT&T is certainly not going to go bankrupt but the question is:
are there better buys out there?
The answer, IMO, is most definitely yes.
Note that T's market share of the LD market, its #1 business, has
fallen to nearly 50% from nearly 100% in 1984; in the last couple
of years, the fall in T's market share has been accelerating and
it continues to slide.
Will this new CEO turn things around? (That can be answered
with this question: Is he a miracle worker?) |
