First of all, remember that several of the RBOCs
such as VZ derive a significant part of their revenues
from their wireless operations, and the prognosis for
this side of their business is very good. For the
local revenues, T1 and business revenues are down
(CLEC competition), but over time, DSL revenue will
kick in somewhat. Still, all RBOCs will need to use the
telecom shakeout to get modern long distance networks.
It is obvious that SBC + WCG will happen sooner or later.
This leaves MFNX, TSIX, LVLT and GX, the last two being
the most likely to stay independent. At current prices,
WCOM would also be an easy buy for any one of the RBOCs.
Let's not forget also that a lot of CLEC assets will
also be soon available in BK auctions.
I have also the theory that VSTR will be more than
DT can chew. Their pride will want to see the deal
through, but about a year from now DT will realize
it can't afford it and will need to deleverage. DT's
announcement that it will sell assets to retain
its dividend just tells us that it will not survive
long. You can't behave like a growth company (VSTR
acquisition and paying through the nose for 3G
licenses) and act like a stodgy old utility at the
same time. So, I think VSTR will be for sale in a year
or two. Either Nacchio or Ebbers (if WCOM is still
independent) may be interested.
So, while BT, FT, DT and T are likely to collapse,
amazingly enough the RBOCs may emerge as well positioned
survivors provided that they selectively move from
defense to offense when the telecom crunch bites
hard next year. |
