Re: Anyone surprised?

RARPSL

join:1999-12-08
Suffern, NY

said by n1zuk

:

If profits were to be made with an antiquated network in a rural area, do you think Verizon (and all the other companies before them) would have sold it?

While I tend to agree with you I will play Devil's Advocate and suggest that there might be a profit to be made there but Verizon pulled out due to being able to make a better profit by investing its resources in a different service area.

It is a case of trade-offs. You can make a Profit of $X by investing it in Area1 or a Profit of $5X by investing it in Area2 so you go with putting the money in Area2. It might not just be an inability to make a profit in Area1 but only a case of making a lower profit from Area1 meaning that another company would find the profits from Area1 enough compared to what they could get from other investments to justify investing in Area1.

Note: I am not saying that this scenario is accurate but just suggesting it as an alternate explanation why one company would be unwilling to invest while another might while both would be able to make the same profit.

permalink · 2008-05-17 14:40:16 · Print ·


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