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Technology Stocks : WCOM
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To: Robert Scott who wrote (4230)4/23/1999 12:13:00 PM
From: Doughboy  Read Replies (3) of 11568
 
While I agree that AT&T will help its residential services, where's the profit margin in that? You'll basically be spending billions of dollars to upgrade cable systems so that customers will lock themselves into paying you 15 dollars a month in internet fees. And residential long distance is not where the money is made. Many of AT&T's customers (maybe as much as 20-25%) are money losers or breakeven customers. 5 cents a minute is a loss leader. Even if you recoup the access fees that are paid to RBOCs, you still only add only a few pennies of profit margin; and remember, AT&T will end up losing market share in the long distance market to RBOC entry. I think Armstrong thinks that he'll make it up with eyeballs on At Home and Excite, but AT&T doesn't own them (at least not yet), and the whole "eyeballs" thing I think is oversold. Global corporate networks are where the money is made, and that is where WCOM is positioned.

Doughboy.
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