ON TOUGH TIMES FOR TELECOMS
FEWER CHOICES
Yet another unexpected consequence of the current global credit crisis may be better and cheaper broadband and other services from the current oligopoly providers. As this piece by Laura Holson in the Bits Technology blog of the NY Times notes*:
"Communications companies like AT&T and Verizon have long been considered a safe bet in troubled times. But Craig Moffett, an analyst at Sanford C. Bernstein, predicts the economic downturn will take its toll on those companies next year as credit becomes harder to get and customers tighten their belts.
In a report released Wednesday, Mr. Moffett cut his earnings estimates for AT&T and Verizon, saying that scarce capital and higher costs to borrow money will translate into lower earnings."
The article focuses on the tough financial choices faced by providers of both wired and wireless services. An example:
"Sprint’s venture with Clearwire to build a fourth-generation wireless network is dependent on its access to funds. According to Mr. Moffett, Sprint executives said they have a future need for an additional $2 billion (aside from the $3 billion it already has from investors) to build out the network."
Maybe they'll get in line for a bailout as well.
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