Hi DT,
I find myself very much in agreement with you regarding the problem with the demise of strategic long term thinking and execution of business plans. I have long railed against the false signals that the quarter to quarter reporting of corporate results creates, in view of Mr. Market's insane and irrational mood swings. That said, I will defer to your greater understanding of Mr. Armstrong's vision. I must say that I subscribed to it two years ago when the story was fresh, but what I am wondering today is whether AT&T, as a bureaucratic giant, can be nimble enough in the required timeframe to roll out the local telephony services that were always the linchpin of the Armstrong plan. I still don't have a clear picture of the method they will finally settle on for provisioning "life-line" reliability. I know that there are tests of a couple of different visions, that being the battery backup attached at the node and alternately the provisioning of DC power from the headend to the node. But I haven't heard that there is a definitive solution yet. And in the meanwhile, we have the issue of the continuing deterioration of margins in T's LD voice business. What I believe the WS analysts are looking at is a real problem with T's ability to maintain a customer base for its most lucrative services, which are being targeted by every ILEC and CLEC in the country.
So, while I generally agree with you that an AT&T empire would be the an elegant one, I also believe that the grand strategic vision of Mr. Armstrong may not be suited for the current competitive climate we find ourselves in. When an astute commentator like Loring Wirbel
[ eetimes.com ]
is suggesting Ethernet over abandoned dark fiber as the killer solution for the last mile, I have to wonder how Armstrong's HFC solution can compete. There are going to quite a number of vulture fund consolidators who will be buying up network assets for pennies on the dollar in the next couple of years and offer services at dramatic discounts to the present providers. I believe it is this absolutely fierce competition for T that Wall Street fears. Ironically, after WS itself created that competition inadvertently through massive over-investment in the telecom sector. T, IMO, will be the victim of changing times.
All the best, Ray :) |
