| Bell South outlook shaky; cost cutting needed Morningstar analysts see a lot of problems with Bell South's prospects. These cost cuts are absolutely needed if they are to obtain sufficient funds for the capital expenditures needed to improve broadband services.
We expect the firm to steadily lose fixed-line phone customers over the next several years, and those remaining will pay less. We assume that the firm will provide this service to a bit more than half the households in its service territory in 2009, down from around 80% today. We think revenue from new services, including a modest contribution from television services, will only partially offset this loss. We expect margins will shrink and capital spending will rise going forward to meet the competition, hurting returns on capital.
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AJ023
join:2001-12-25
Forest Hills, NY | I didnt realize how good we had it here with RCN even though I wish they were run better. RCN is fiber to 900 feet. BellSouth will only have fiber to 5000 feet of 50% of its area, thats horrible! Heck DSL at 4000 feet which is what my loop length distance is, is probably about the same service one would get. Put in ADSL2+ at those speeds thats around what, 24MBPS I think tops.
RCN is at 10MBPS max but can scale to 20MBPS potentially. After that its gonna need some new equipment. |
