Uncommon Wisdom

Apr 26 2011   4:08PM GMT

Verizon financials point to the problem with copper, broadband mobile

Tom Nolle Tom Nolle Profile: Tom Nolle

Verizon reported its numbers and demonstrated why voice and legacy is out and FiOS and mobile is in. The company beat AT&T on subscriber ads, something the media links to the iPhone availability. I’m not so sure, given that AT&T didn’t report any noticeable loss of customers because of its loss of exclusivity. But at any rate, the numbers also showed that FiOS is picking up strongly and that DSL (limited in speed by local loop characteristics) is losing ground in its basic form. That’s significant because it suggests that copper loop may be getting a lot less valuable.

The value of copper suggests a fundamental issue for the telcos. Leveraging their key asset is on the ragged edge of financial whimsy, and yet deploying FTTH is over the top for most areas. That’s another reason to jump into mobile, but it also casts doubt on whether wireline is even a rational long-term business. Since wireless can’t easily support HDTV broadband to the home, that begs the question of whether telco TV is feasible in some areas of the world, and whether OTT video can really be expected to overcome multichannel broadcast cable and satellite.

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