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Technology Stocks : Nortel Networks (NT)
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To: The Phoenix who wrote (6683)9/5/2000 11:24:35 AM
From: telecomguy  Read Replies (1) of 14638
 
Gary, your naivete continues to surprise me. You can bet that there is no FREE LUNCH in this world.

AT&T will SOMEHOW get their revenue bundled in for free local calling.........as for free international long-distance DREAM ON!

Besides it sounds like one of those promo plans where you try it for free for awhile and then once you decide to use it permanently, you end up paying regular price -- whatever that is in the US.

There is one basic business fact you don't seem to understand regarding free telephony. 80 to 90% of Carrier's revenue is STILL generated by long-distance and local calling revenue. If this is given away for FREE, how do you expect these Carriers to survive and generate the capital to build/maintain their network?

It has to be replaced by another revenue source and unfortunately, the data world (Internet) seems to fallen in love with FREEBIE model. This will only sustain itself until the capital market realizes you can't fund the internet business model on advertising revenue (look at Yahoo even and the host of net based companies who are spiralling into bankruptcy & ch. 11).

Of course this is one of the main reason why NT is trying to take leadership position in

1) providing guaranteed QoS

2) managing bandwidth/service levels to allow ISP's and Carriers to CHARGE for net access at different levels of performance

Meanwhile, long-distance will still be a cash cow for long time (at least long after you and I are in the grave Gary!)
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