1) Doesn't Wcom have to pay the RBOC's for the "last mile connectivity" to terminate the calls? So if the consumer gets unlimited calling, it's possible that many of these Neighbourhood customers will generate LOSSES for WCOM?
2) Will this plan likely only attract the heavy local users? So all WCOM ends up doing is subsidizing these heavy users since the $50 won't cover the payouts that has to be made to the RBOC's who own the copper to the homes.
This plan could generate new revenue but at NEGATIVE cashflow!!!
Of course, why do you think its trading at $1.40? Because its future is assured?
Once again, when you buy a stock, you buy its management..the Neighborhood Plan is only as good as the people who put it together.
Nonetheless, one of your points I can respond to fairly readily. I see from your writing that you are probably Canadian or English. If the former, then you may understand better what I am about to say. This is a big country and Americans tend to sprawl with family and friends all over the place much like myself. If people are in fact like me, they will be attracted to the Neighborhood Plan not so much for its local benefits but any advantage it can provide re long distancing calling. And its in that niche from where I think the majority of the users will come. Savings in long distance calls will be the draw.
Will it prove to be a postive or negative for WCOM....I don't have a clue. However, the market has priced into the stock just about every negative possible and does not see anything that will be a boon to WCOM in the foreseeable future. That means if the N.P. proves to be even mildly successful, WCOM's stock will benefit.
ted
EDIT.WCOM just went positive in the middle of this miserable market day! |
