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Telcos vs. cable
Aug. 19th, 2008 11:15 amFrom a comment I just submitted re this post at the New York Times.
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There's a contradiction in Mr. Moffett's analysis, assuming this is a fair representation of it.
He is quoted as saying copper wire is going away:
“It is an obsolete technology,” he said. “It’s not like horses lost share of the transportation market until they stabilized at 40 percent market share.”
Yet, at the same time he says copper is 100% going away, he also predicts that FiOS will only have a 40% uptake:
"He assumes that 40 percent of the customers passed will buy at least one FiOS service."
It's one or the other. It can't be both. And if his core assumption is that copper is completely going away, then he's understating Verizon's revenues in his model by a factor of 2.5
I suppose one way of getting out of this box is he's assuming 60% of Verizon's customers will switch to cable as their sole replacement for copper. But given he does not contest that FiOS is a better package from the consumer's point-of-view that seems like a very low number. Or he's very skeptical about people pursuing their own best interests -- not that there's anything wrong with that, but it's not the usual path of someone in the financial commentariat.
*^*^*^*^*
There's a contradiction in Mr. Moffett's analysis, assuming this is a fair representation of it.
He is quoted as saying copper wire is going away:
“It is an obsolete technology,” he said. “It’s not like horses lost share of the transportation market until they stabilized at 40 percent market share.”
Yet, at the same time he says copper is 100% going away, he also predicts that FiOS will only have a 40% uptake:
"He assumes that 40 percent of the customers passed will buy at least one FiOS service."
It's one or the other. It can't be both. And if his core assumption is that copper is completely going away, then he's understating Verizon's revenues in his model by a factor of 2.5
I suppose one way of getting out of this box is he's assuming 60% of Verizon's customers will switch to cable as their sole replacement for copper. But given he does not contest that FiOS is a better package from the consumer's point-of-view that seems like a very low number. Or he's very skeptical about people pursuing their own best interests -- not that there's anything wrong with that, but it's not the usual path of someone in the financial commentariat.
