Tuesday, October 25, 2005


  • Definition: [n] a kind of hedged investment meant to capture slight differences in price; when there is a difference in the price of something on two different markets the arbitrageur simultaneously buys at the lower price and sells at the higher price.
  • Too much telecom revenue is Arbitrage.
  • UNE-P was supposed to be a strategy to build up MSA market share prior to the capex of a switch in that Metro Service Area. Not many did that.
  • FDN bought Supra, a Resi CLEC with supposedly 250k lines in South FL. Resi CLEC is not a long-term viable strategy, since whenever fiber loops are installed the copper is retired and the CLEC loses customers. Any Resi CLEC strategy has to be UNE-L for DSL and Voice (and maybe IPTV) and more. Even UNE-L is subject to copper retirement.
  • Some of these CLECs need to take a look at services that can be added, like Z-Tel's PVA (Personal Virtual Assistant), to make them stand out.
  • One comment on Triple Play: there is a maximum what most people will pay on one bill (approx. $135) and that is less than what most pay separately for TV, voice and internet.
  • IPTV will not be the revenue savior that the Tele-Barons hope for.
  • One comment about Arbitrage and VOIP. As the FCC regulates VOIP (and taxes on DIDs are probably coming) under the "Duck" strategy, VOIP will become more expensive than POTS. The elimination of Virtual NXXs won't help either Then what do 1200+ VOIP Providers do??
  • Also, what happens when the pipe provider walls in his garden?
  • Arbitrage and Cellular. MVNO Strategy (Mobile Virtual Network Operator) is a pure marketing play being used by ESPN, Disney, and Virgin Mobile. Beware though. MVNO will not last as long as UNE-P. (The RBOCs are horrible partners - in fact, the word "Partner" means "one to screw regularly. Ask anyone that has ever partnered with an RBOC, the owners of the cellular world as well, btw).

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