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Technology Stocks : The *NEW* Frank Coluccio Technology Forum
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To: ftth who started this subject6/17/2003 11:21:51 PM
From: ftth  Read Replies (1) of 46821
 
A snip from this article about the RBOCs and FTTP and triple play (posted by greg h2o on mrv thread): Message 19034752

"But churn reduction would make fiber a winner, the analyst concludes. The Bells risk losing as much as 30% of their residential phone customers to cable companies, says Hodulik. If a bundle of new fiber services prevents those defections, then it will have all been worthwhile.

I just don't understand this logic. Wouldn't it be a hell of a lot easier and cheaper for them to just lower their phone rates to match the cable companies rates, instead of building a new network to provide the same service? They should also include the features the cable MSO's include for free like caller ID (which the RBOCs collect 6000% profit margins on since the actual cost is pennies).

Do the RBOCs actually think they can spend several thousand dollars per subscriber to build a new fiber network, and will be able to keep phone subs at their current prices, just because it's now over a new network? They'll have to lower monthly phone service prices over the new network anyway, just to be a competitive match in price and features. If they don't do that they still have the same churn, but billions in new capex as well. So I just don't follow the logic, and therefore don't believe they will actually do anything in a big way, 'cept maybe greenfield builds.
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