Wednesday, August 02, 2006

Are we at the Tipping Point?

Ken Pietro writes about how muni broadband and wi-fi voip will eat into cellular company/ILEC revenues and profits. How do they pay off all the debt from the fiber build-out and the 3G network build? Cell companies still have debt from 2G and 2.5G roll-outs. Cingular is now charging $5 extra a month to people without a GSM phone becuase they want to can CDMA and TDMA. Cell companies are about to pour out more money for new spectrum, so we can all have TV on our handsets. The Net Neutrality debate is about whether the telcos can establish walled gardens not just on their cell network, but on their fiber networks as well. Don't think that cablecos are without debt. While MSOs are racking up VoIP users to the tune of 10M+ so far, they are using that new revenue to pay down debt from their network builds. At what point will the revenue loss from muni BB systems and VoIP create a tipping point for telcos and perhaps the PSTN?? Maybe the telcos should actually innovate - not litigate and lobby but call it R&D.

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