RadioDoc
58ef2c0
Premium,ExMod 2000-03
join:2000-05-11 | reply to Bit
Re: The other MSO's
Let's see now...losing a low-margin POTS line to cable vs. getting a fat cash cow video subscriber from cable. I think I'd take that deal.
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Toolmaster of La Grange. |
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Bit
Premium
join:2009-02-19
00000 | Low margin? Yeah right. |
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RadioDoc
58ef2c0
Premium,ExMod 2000-03
join:2000-05-11
 ·AT&T Midwest
| Yes. Low margin. Basic residential POTS is low margin. So low that business lines have subsidized it for decades. Now cash-cow cable TV subscribers are subsidizing the cable POTS product.
So yeah, if I was Verizon I'd happily lose several $10 a month POTS lines to pick up one $100 video customer.
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Toolmaster of La Grange. |
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Bit
Premium
join:2009-02-19
00000
 ·VOIPo
 ·Cox HSI
4 edits | Who said anything about "basic"? You think they're losing $10 line customers to $30 cable VoIP providers? They obviously aren't. They're losing the $50+ caller ID, tons of LD, keep my name out of the phonebook fee, call-forwarding, voicemail, 3-way, bunch of extra feature and calling plan types who can get the same or more service for 1/2 the price from telco competitors or go cellular. Advanced services cost telcos mere pennies to provide while they charge an arm and a leg for it, resulting in people fleeing POTS in droves. I can't think of too many services than have insanely high margins of Caller ID and other telco 'advanced services', except maybe cellular texting charges or cellular per KB bandwidth fees. VOIP competitors simply aren't as greedy as the telco, but make no mistake, telephony is very lucrative, otherwise cable competitors wouldn't be entering that business so agressively.
Meanwhile with your "basic" logic, they're losing a ton of big margin $50 pots customers and picking up a few low margin $50 video customers. |
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RadioDoc
58ef2c0
Premium,ExMod 2000-03
join:2000-05-11
·AT&T Midwest
| $10 revenue, not consumer cost. This is about margins and one video customer represents a much higher profit over expense ratio than POTS ever is even with $5 Caller ID, etc. And if you think those fees are not coming soon to a cable POTS and VoIP provider near you you're naive. Comcast is already tacking them on here.
But thanks for trying.
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Toolmaster of La Grange. |
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Bit
Premium
join:2009-02-19
00000
1 edit | Conjecture, but thanks for trying. |
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RadioDoc
58ef2c0
Premium,ExMod 2000-03
join:2000-05-11 | No, just the truth. |
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Bit
Premium
join:2009-02-19
00000 | LOL. |
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RadioDoc
58ef2c0
Premium,ExMod 2000-03
join:2000-05-11 | Indeed. |
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bogey780
join:2004-03-19
Here
| reply to Bit
No, he's right.
It's accepted fact that pre-divestiture, long-distance and business subsidized home phone. Post-divestiture we've seen how the low margins cause everyone who tries and become a CLEC to eventually either bow out or become a niche brand.
With POTS the person with a basic phone is a "no margin" customer. The company is making a few pennies off of them a month and it's why you never seen retention bending over backwards to keep them. Those extra charges are the only thing making it profitable for residential phones on a whole.
'VOIP competitors simply aren't as greedy as the telco, but make no mistake, telephony is very lucrative, otherwise cable competitors wouldn't be entering that business so agressively.'
It's not that they're not greedy. It's that they have a lower base cost and they need an edge to get customers. MSO's are entering it not because it's lucrative but because it helps round out their service offerings and allows them another source revenue with minimal infrastructure cost.
The fact that the MSO will spend millions to get into telephony while telcos spend billions to get into video tells you who has the sweeter gig. |
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bogey780
join:2004-03-19
Here | reply to Bit
Absolutely not conjecture. |
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Bit
Premium
join:2009-02-19
00000
·VOIPo
·Cox HSI
4 edits | reply to bogey780
Telcos are getting into video because they're losing their voice business. Without another source of revenue they would be extinct.
If video was the end all be all cash cow they would have done it 15 years ago instead of making BA&PA type tax deals while not deploying shit. If it were a money tree they would have taken the financial goodies AND deployed. They only started a few years ago because their voice customer base was evaporating rapidly with the rapid expansion of VOIP, dying dialup, and cheap cellular.
But it doesn't matter...you want to believe that those big bill paying POTS customers weren't a huge profit generator while these $50 video subs are cash cows you go right ahead. |
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Bit
Premium
join:2009-02-19
00000
·VOIPo
·Cox HSI
4 edits | reply to bogey780
Absolutely conjecture. You think all these new FiOS adds are $100 video payers? Hardly. Just like cable, Verizon started triple play promo blitzing and that is where these new adds are coming from and they're no more cash cows that any other discount driven gets are. |
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bogey780
join:2004-03-19
Here
| reply to Bit
'If video was the end all be all cash cow they would have done it 15 years ago...'
Uhhh...they were.
It failed because the technology couldn't support it.
'But it doesn't matter...you want to believe that those big bill paying POTS customers weren't a huge profit generator while these $50 video subs are cash cows you go right ahead.'
I'm just guessing you don't work in the industry. The low profitability of POTS was the reason why the telecoms lobbied for relaxation of LATA regulations for long distance at the expense of POTS revenues. Everyone who has dealt with any telecom work knows this. |
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RadioDoc
58ef2c0
Premium,ExMod 2000-03
join:2000-05-11
·AT&T Midwest
| reply to Bit
Re: The other MSO's
said by Bit  :If video was the end all be all cash cow they would have done it 15 years ago I thought you might be informed but this tells me you're mostly making this up.
Ameritech (now AT&T) built and ran Americable 15 years ago. It was sold to Wide Open West as part of the SBC merger deal with regulators. They also had Mobile One cellular (one of the original AMPS operations), which was sold to Verizon as part of the same deal, and that goes back to the mid 80's. They'd still have both if it were not for some ham-fisted regulatory requirements.
Given what I actually know, and what you evidently don't, I'll stand by my statements.
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* sigh * someone is a little trigger happy... |
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