Thursday, February 10, 2005

BellSouth: 'We're so happy we can hardly count'*

The Cox paper in Atlanta, The Atlanta Journal Constitution, reports that Atlanta-based BellSouth's CEO, F. Duane Ackerman, is pleased as punch with his company's position and business strategy.

If you make your way down to the end of the article, you'll find that Ackerman says his company has the highest operating margins in the industry. Gee, wonder what they're doing with all that money? Sure not spending it on fiber in Lafayette.

But what I found intriguing about the comments in the article related to the company's revenues and their business strategy.

In particular, there's the fact that income from Cingular now accounts for almost 40 percent of the company's revenue. Sure, Cingular is growing, but might this not also indicate a decline in revenue from line-based telephone service — aka, BellSouth's baseline business?

But, even more curious was Ackerman's statement that long-distance is one of three pillars of BellSouth's core strategy. He says this after saying that AT&T is suffering from double-digit annual declines in revenue. AT&T is, uh, primarily a long-distance company.

Then there's the fact that cell phone business is undermining the future of, uh, long-distance. The faster the cell phone business grows, it seems, the faster the long-distance business will erode. Do any cell phone users out there remember the last time they made a long-distance call over their landline?

So, has BellSouth decided to target consumers who don't know that they can make long-distance calls for free over their cell phones? Cynical as it is, it would not be without precedent. After all, these are the same people still pushing Frame Relay as state of the art to businesses in South Louisiana!

* From the Pink Floyd song "Have a Cigar" from the album Wish You Were Here.

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