Wednesday, January 26, 2005

"BellSouth's Earth Is Flat"

In Light Reading: BellSouth's Earth Is Flat.
...the real take-away from BellSouth's earnings call is that all is not cozy right now. After stripping away the one-time items in its report, growth for BellSouth’s core businesses has essentially remained flat over the last three years, which may be an early signal that competition from cable operators and CLECs is slowly starting to erode the RBOC's hold on its territories...

Longer term, analysts say the Bells will have to be successful in offering video services to compete.

“They’re going to need between 15 to 20 percent video penetration, and I don’t think they’re going to get that with a bundled satellite deal,” McCourt says.
Translation: BellSouth needs fiber for IP video and they need it now.

(They'd have been wise to have used LUS' fiber--but blew that one. If I were a smart analyst I'd read the tea leaves of the astonishing decision to forfeit its best chance to test advanced services in its footprint as a clear sign that management doesn't understand what is necessary to survive. And issue an immediate "sell" rating. Full disclosure: I carry no telecom in my portfolio. :-) )

PS, don't miss the comment. Hilarious. I think.

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