Mike: Perhaps I can resolve to your satisfaction whether dial tone is a money maker.
The following is from Bell Atlantic's 98 10K.
Revenues:
Local services $13,113.2
Network access services 7,158.6
Long distance services 2,190.1
Ancillary services 1,845.4
Directory and
information services 2,298.0
Wireless services 3,328.5
Other services 260.1
TOTAL OPERATING REVENUES $30,193.9
Employee costs $ 9,047.2
Depreciation
and amortization 5,864.4
Taxes other than income 1,606.9
Other operating expenses 8,333.9
Total Operating Expenses $24,852.4
Lets simplify by removing depreciation from operating expense:
Total Revenue: 30.2 billion
Total Expense: 18.9 billion
EBITDA 11.3 billion
Subtract out Network Services which at this time was
predominately access charges and one is left with EBITDA of
$4.1 billion.
Now if one does a margin analysis on the other main
components of revenue you'll find that LD (Intralata toll),
wireless, ancillary, directory are all high margin services.
I can't get any more specific w/o the data in from of me.
However if we presume they each have EBITDA margins of 50%,
subtract out 9.9 billion of revenue and 4.9 billion of
expense and we are left with:
Revenue: $13.1 billion
Expense: 14.0
EBITDA (0.9) billion
sec.gov
I don't think its really that bad because not all the
aforementioned services are driving 50% EBITDA margins but
all-in-all its pretty close.
Basically that why I said that res dial tone has been a
money loser, biz dial tone is profitable, but not greatly
so and the money maker was on access charges and other
services.
This can be confirmed anecdotally by just looking at the
former US West. It had the highest percentage of rural
lines, rural HH lines, and hence it had the worst
profitability not withstanding the pop from other services.
From a billing perspective, wireless voice is metered, and
wired voice is most often not. Big difference. This is where
I diverge from elmatador. Pretty tough - even in wireless -
to provide 1200 minutes a month at $25 and make money.
I'm not an apologist for the RBOCs but they do have do be
given some latitude and respect for the universal service
argument.
ww
p.s. I can't drop by too often nowadays, but just wanted to
let some folks know I wasn't dead. :-) |
