NNSquad - Network Neutrality Squad
[ NNSquad ] Re: Subject: Re: [IP] "Entry level pricing"
ssc wrote: > Their debt levels are for them and their regulators to hassle over. well, not really. If they have a problem and their network is the only network available and every other operator uses their network, everyone will have a problem. then there are other impacts; some of these companies have 100K-250K direct employees; some have 50-90 Bn USD in debt which is bought by funds and banks > However I see your point, Im assuming EBITDA is pan-european? I also > would guess the quality of phone plants varies greatly in the EU > considering many old Soviet satellites joining. the answer here is "it depends"; the fixed-mobile substitution would have less impact on relatively lesser penetrated countries, while it would hurt the most countries where penetration was nearly 100%. > Here in the US we are moving to a wireless phone for POTS despite the > lame protestations of the wired incumbents, who as mentioned earlier > make money by merely re-writing off their 70- year old outside wire > plant every 5 years while doing squat to upgrade it. Wireless POTS makes > sense for more and more of us every day, and I certainly can see why. as I understand it, in the US the wireless business is growing now; you can compensate losses in the fixed with the relatively new growing business of mobile. here we have penetrations well above 100% for mobile grown before the pressure on fixed really started. we enjoyed a period in which telcos were looking at the "triple play" thinking that all customers would have fixed voice, mobile and the internet. this is the period when they piled up their debt; a telco has a typical debt/ebitda around 2.2x-2.8x what is happening is that mobile is substituting fixed, internet is shrinking margins on remaining fixed customers and mobile business has already reached full expansion so it cannot help to address margins reduction (as a matter of fact, due to competition in a saturated market, in some countries total mobile revenues are starting to reduce). There's no new business which can compensate. Some telcos are compensating by running operations in other countries where mobile is still growing strong, but others face a very tough time and I don't think it will get easier anytime soon. ciao, s. -- blog.quintarelli.it www.eximia.it www.reeplay.it