Yes, I saw this story and I can't say it's not disturbing, but at the same time I think they fail to realize some of the strengths of what is taking place.
Cable has had a bad rap for some time. They lost a lot of customers to the dish. I think T can win back some customers by applying some service know how and win back business based on the single provider mentality. They may not have the latest and greatest, but they will have a system that is good enough. Perhaps similar to the Disk Drive problem. Sure you can make a 40 gig hard drive, but will people want it and need it?
So, when you can put 600 to 1.5 MBPS through a cable connection, is it enough? I've talked to people building out the T system and they said 2 years ago that they could go to 30 MBPS. It's only a question of time and money. The Salt Lake City project for T is showing how they can build out a state of the art system in rapid time. This type of system will be replicated as quickly as the equipment can be made. That's why HLIT has done so well. It's only a matter of them cranking up the line, not if the buyer is available.
So, with that bandwidth, you offer TV/entertainment, internet/e-commerce, and local and long distance calls all under one bill. Seems like a good deal. I would jump on it in a minute if they had it here in Byron Bay.
So, what is the competition? XDSL? Fixed Wireless Broadband? The dish? Seems like they all face the same problems and T will be the consumer's choice. Clearly, Long Distance voice as we know it is in trouble. We all saw this coming when we first heard someone speak on the Internet. Sure, it was low quality, but only a matter of time before they could make it equal. So, does the T empire come crashing down because long distance goes to 7 cents? Maybe, but at the same time this company has not been trading up a lot in advance of some news that just appeared. This is old news.
I think T faces some very great challanges and this article puts it all in place. What they don't say is how T may have the mindset of the people to bring new products to market faster than people imagine. It will be interesting.
I bought T recently at 47. I think that Mr. Armstrong will pull a rabbit out of his hat again to support his share price. I don't think he will allow the Media One deal to pass with a cash penalty. I think it's very likely barring a really trying market that T will trade back to the mid 50's in 2 months, at which time I may take a profit, or not depending on the rabbit.
And, in the mid 40's, how much lower do you think it will go while you wait for something to stimulate the price?
Regards,
Mark
PS My current interest is in Netro (NTRO). They make high speed Fixed Wireless (LMDS) equipment.
Also looks like Hutch has broken out. Will be interesting to see if they can stage a come back now. Do you have any targets? |
