The Telco Debt Binge May End Badly

brooks7 6/19/2018 | 4:47:44 PM

Re: Is Comcast in the same boat?

I just to point out 2 errors in what you are saying:

1 - Most of the purchases are actually for network assets. You can argue that they overpaid for them or whatever. Outside of DirectTV, AOL, and Yahoo are network assets, mostly wireless.

2 - Netflix is becoming a content owner. Just like Comcast. Now just like AT&T. Content and Applications (for the latter see Microsoft, Amazon and Google) are much more profitable when done well. When done poorly, Content and Applications crater like John Carter on Mars.

Finally, I agree with your assertion and that the telcos need to stick to their knitting. This would be best done by shutting down most of the NFV/SDN stuf and most of the HQ staff as well. Build networks and put more money into making them better. Wireless and Fiber to the Business is where it is at. Let the rest rot in the ground. Stop trying to turn a pure commodity into something more exotic. Stop trying to invent network services that nobody will buy (My favorite is when they trot out Time-of-Day networks, which have been around for decades).

seven

Reply | Post Message | MESSAGES LIST | START A BOARD

Duh! 6/19/2018 | 3:55:16 PM

Re: Is Comcast in the same boat? To reiterate the words of the late, great Ken Olsen, "stick to your knitting".

Reply | Post Message | MESSAGES LIST | START A BOARD

Duh! 6/19/2018 | 3:52:27 PM

Re: Nobody Worried? I started to write a long-winded response, but it was taking too long.

Short version: T and VZ are two different companies, with different managements, different strategies, different rationales for their largest acquisitions, different balance sheets and different debt ratios. I'd be more concerned about T than about VZ. Warner had better damn well produce.

See also today's Wall Street Journal.

Reply | Post Message | MESSAGES LIST | START A BOARD

Scott Raynovich 6/19/2018 | 10:16:47 AM

Re: Is Comcast in the same boat? Ray,

Yes indeed, Comcast should be added. More debt-laden pipes.

And no, it does not seem very different.

The history of a bunch of suits in NY trying to manage mega-empires is not good.

It's something the WSJ has now picked up on:

https://www.wsj.com/articles/mergers-to-make-at-t-comcast-worlds-most-indebted-companies-1529314201

Reply | Post Message | MESSAGES LIST | START A BOARD

[email protected] 6/19/2018 | 6:34:05 AM

Is Comcast in the same boat? Could Comcast's pursuit of Fox also be added to this debate?

History shows us that these marriages/mergers don't work out and yet.... here we are again.

Is there anything that COULD be different this time around? AOL/Time Warner was in a different eon altogether, before real broadband of any kind was available (and when 'OTT' referred mostly to reactions to an Eddie Murphy joke) so the comparison is a little tough, but I still can't figure what AT&T is going to do with Time Warner unless it has a medium-term strategy to become a media/content company and outsource its network business -- the much talked-about netco/servco split.

Reply | Post Message | MESSAGES LIST | START A BOARD

Scott Raynovich 6/18/2018 | 1:32:39 PM

Nobody Worried? So, I dropped a couple bombs on the industry here and ... <crickets>

any thoughts?

Reply | Post Message | MESSAGES LIST | START A BOARD