Telecom Stock Meltdown
The market misinterpreted Sprint’s dismal report yesterday and punished all of the Telco’s. We are entering a Wireless telecom duopoly (Verizon and AT&T) in which the network effects and the power to offer the big handset maker’s newest gadget, trumps all. Sprint, running two completely separate networks (Sprint and Nextel) is left to spending millions to advertise a commodity product. This is a case study in creative destruction in which their costs are exceeding their profit margins. Their only way out is to hope that some cable company is so desperate for the triple play offering (TV, Broadband and Wireless) that they buy the company before all the customers defect. Sprint cannot keep losing 700,000 customers per quarter and hope to survive. AT&T and Verizon will just get stronger, because even in the recession people will give up their landline and cut back on restaurants before they surrender their cell phone.
Case in point: I was a happy Sprint customer for 8 years until I switched to AT&T last summer. My sole reason was GSM handset selection, not even iPhone. The Sprint rep who disconnected my account didn’t even ask why I was leaving, let alone offer incentives to stay. Too bad if they go out of business since competition is good even if they are all evil. Hopefully someday I’ll be able to buy just a simple voice & data plan for my own devices without their crippled software attempts to channel my attention to crap songs & video…
Creepy. The thought of AT&T having such a large chunk of the cell phone market combined with their new ‘internet filtering’ scheme and other privacy invading ‘business’ strategies is really, really creepy.
[...] 29, 2008 · No Comments As I suggested a few weeks ago, Sprint is going to have a hard time surviving as a standalone company. They reported a $29.5 [...]
I used to be a Nextel dealer. I like counselor selling, even though I made most of my money selling international “call back” telecom down to Australia. It was a blast, I made enough residual income to “retire” for two years. It is great fun meeting new people, helping them out, and making money in the process!
However, three years ago Sprint (after the Nextel take-over) did two things to their dealers:
1) took all the big prospects in-house (ex: Cedar Rapids, IA-200 phones)
2) Hired a dealer “cop,” who made sure the dealerships complied with all standards
Sprint has a $30B loss? Gee, couldn’t happen to a nicer bunch of guys…
Anyway, on a lighter note, here’s a place where I would screen telemarketer candidates for my dealership:
http://www.sandman.com/taliban.html Right, after watching it, they had to answer: “What three mistakes are the telemarketers making?”
Yup, I always got the right people.
Enjoy.
Tom