 kapilThe Kapil
join:2000-04-26
Chicago, IL | No Sometimes things have to have a better reason than just "Wall Street Expectations".
Comcast is big enough. And bad enough. On it's own.
Sprint is doing fine on it's own. A decade of bad management can't be fixed in a quarter or two. Hesse is working on it. Give him time.
What the fuck kind of "synergies" are there to be had by merging a TV provider and a wireless phone company?
--
»www.VoIPTrunk.com |
|
Romney2012Defeat Obama 2012-Chg we can believe inPremium
join:2002-03-03
USA
kudos:4 | said by kapil:What kind of "synergies" are there to be had by merging a TV provider and a wireless phone company? I agree that Comcast shouldn't try to buy Sprint. But Comcast is much more than a TV company. They are a major internet provider and a major wired phone company as well. But I don't think they need TO BUY a wireless company to offer a quad play option. They can do that thru agreements with a wireless company.
--
My BLOG .. .. Internet News .. .. My Web Page
|
|
 PhoenixDown-- Wants FIOSPremium
join:2003-06-08
Fresh Meadows, NY
kudos:1 | reply to kapil
Well, aside from the quadruple play of Internet, TV, VOIP and Cellular -- Sprint still has a domestic backhaul network that Comcast could use to improve their own with.
--
~ Insert a Funny Sig Here ~ |
|
iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
 ·Comcast
| Actually, I'm pretty sure that at this point Comcast's backhaul network is higher-capacity than Sprint's, or at the very least is heavyduty enough to handle subscriber load and then some. Comcast isn't a Tier 1 but they're closer to being one than, say, Hurricane Electric. |
|
| reply to kapil
said by kapil:What the fuck kind of "synergies" are there to be had by merging a TV provider and a wireless phone company? It's not so much about "synergy," as it is about competitive position.
AT&T and VZ are Comcast's primary competitors. Both of them have wireless divisions that are ridiculously successful and profitable (~60% of wireless market combined).
Wireless is significantly more profitable than wireline for them, and have added billions to their bottom line. If it weren't for wireless, they'd be closer to Qwest's situation right now.
Why wouldn't Comcast want part of that market? If nothing else, to remain competitive. Sprint and Clearwire are the fastest way there. |
|
| reply to iansltx
said by iansltx:Actually, I'm pretty sure that at this point Comcast's backhaul network is higher-capacity than Sprint's, or at the very least is heavyduty enough to handle subscriber load and then some. Comcast isn't a Tier 1 but they're closer to being one than, say, Hurricane Electric. Indeed, all those far flung cable systems around the country are connected to their network.
Comcast is one of the biggest networks that isn't a Tier 1. Interestingly, they don't peer particularly aggressively like other networks do.
There's still quite a bit of value in SprintLink. It's Tier 1 network with a who's who list of big corporate and government customers. Sprint doesn't really break out its numbers separately, but it seems to one of the few consistently profitable parts of Sprint, and they've been harvesting it for cash. |
|
| reply to Romney2012
said by Romney2012:I don't think they need TO BUY a wireless company to offer a quad play option. They can do that thru agreements with a wireless company. You're right. They can, and are, pursuing that path right now with with wholesale agreements with Sprint and (also an equity investment in) Clearwire.
It seems to be the cheapest and quickest way to wireless, with the least amount of risk.
But by wholesaling, they're dependent on a partner, and they don't have full control over the wireless network and product. This can reduce the likelihood of success.
And if they are successful, they're leaving a lot of money on the table by not owning it outright. Especially when they had the opportunity to buy them out on the cheap. Keep in mind, AT&T and VZ make billions a year on wireless, and keep squeezing more out of that golden goose. |
|
 koitsuPremium,MVM
join:2002-07-16
Mountain View, CA
kudos:14 | reply to Samsonian
said by Samsonian:said by kapil:What the fuck kind of "synergies" are there to be had by merging a TV provider and a wireless phone company? It's not so much about "synergy," as it is about competitive position. Buying out another company is in no way "competitive" in my book.
--
Making life hard for others since 1977.
I speak for myself and not my employer/affiliates of my employer. |
|
koitsuPremium,MVM
join:2002-07-16
Mountain View, CA
kudos:14 | reply to kapil
said by kapil:Sometimes things have to have a better reason than just "Wall Street Expectations". Comcast is big enough. And bad enough. On it's own. Sprint is doing fine on it's own. A decade of bad management can't be fixed in a quarter or two. Hesse is working on it. Give him time. What the fuck kind of "synergies" are there to be had by merging a TV provider and a wireless phone company? I gave your post thumbs up because I agree wholeheartedly.
However, there's one thing people forget: Sprint provides actual tier 1 transit (that is to say, actual fibre running from A to Z end). Don't worry, my statement isn't implying that Comcast might want to buy Sprint to gobble up that infrastructure, but it's not too far-fetched given that Comcast's competing with Verizon FIOS.
Just something to keep in mind: Sprint isn't just a "wireless phone company".
--
Making life hard for others since 1977.
I speak for myself and not my employer/affiliates of my employer. |
|
patcat88
join:2002-04-05
Jamaica, NY
kudos:1 | reply to Samsonian
said by Samsonian:Keep in mind, AT&T and VZ make billions a year on wireless, and keep squeezing more out of that golden goose. But AT&T and VZs billions are on a downhill coast. The unlimiteds (Cricket/MetroPCS/Revol), and now Clear's uncapped internet service at biting away viciously. ATT/VZW's only real customer base is those that think more expensive=better and rural customers. |
|
patcat88
join:2002-04-05
Jamaica, NY
kudos:1 | reply to koitsu
said by koitsu:However, there's one thing people forget: Sprint provides actual tier 1 transit (that is to say, actual fibre running from A to Z end). Don't worry, my statement isn't implying that Comcast might want to buy Sprint to gobble up that infrastructure, but it's not too far-fetched given that Comcast's competing with Verizon FIOS. Just something to keep in mind: Sprint isn't just a "wireless phone company". Being Tier 1, and having all those profit peering agreements is very important. The more traffic you pump out, the more pressed is the peerer to upgrade their links to you for more $ to you.
Guess what powers FIOS's massive bandwidth needs? UUNet/MCI. Verizon doesn't pay anyone for bandwidth, the world pays them.
Buying Sprint with SprintLink means Comcast's bandwidth costs are now free. Since Comcast is the largest cable co in the USA, they have an incentive to tame their bandwidth costs. |
|
| reply to koitsu
said by koitsu:said by Samsonian:It's not so much about "synergy," as it is about competitive position. Buying out another company is in no way "competitive" in my book. First of all, that's a very simplistic view of business. One not shared by most, including anti-trust regulators.
Second, did you not read the rest of what I wrote in that post?
Comcast competes against AT&T and VZ on the wired side, but not (yet) in wireless.
Yet you apparently think Comcast entering that market would result in less competition? |
|
NormanSPremium,MVM
join:2001-02-14
San Jose, CA
kudos:4 Reviews:
 ·SONIC.NET
·Pacific Bell - SBC
| reply to iansltx
said by iansltx:Comcast isn't a Tier 1 but they're closer to being one than, say, Hurricane Electric. Comcast is probably no closer to being a "Tier 1" network than Hurricane electric. There is more to being a "Tier 1" network than size.
SBC became a "Tier 1" network by buying a "Tier 1" network.
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum |
|
|
|
| reply to patcat88
said by patcat88:But AT&T and VZs billions are on a downhill coast. We haven't seen that yet. Both of them have been able to keep boosting revenue, profit, margins, ARPU, subscriber count, and all those other financial metrics.
There's a bunch of reasons for this. The most obvious is the barriers to entry. You can't just into the game and start building a wireless network. You need spectrum licenses from the government, which don't come cheap. And building a network requires lot of capital. Not that many people have billions lying around, and the desire to do this.
And even if they did, they know that the 2 biggest players are entrenched in this market. AT&T Mobility and VZW have ~60% of the market, who wants to jump into this?
In a perfect market, there's little to no barriers to entry and many competitors. This market is far from that, and the government's policies have only made this worse (extorting insane prices for spectrum, approving big wireless mergers, etc.).
The unlimiteds (Cricket/MetroPCS/Revol), and now Clear's uncapped internet service at biting away viciously.
They're all tiny compared to AT&T and VZW for the time being. And they've had a negligible impact on the big 2.
The regional CDMA unlimited carriers have done a decent job so far though. But, their growth has slowed dramatically since Boost Mobile (on Sprint's iDEN network) and T-Mobile have launched aggressive prepaid plans of their own. Both of which are national carriers.
Cricket/Leap, MetroPCS, and Revol should merge already. They could fit their networks together like a jigsaw puzzle, achieve greater scale, have a network that is somewhat national in size, and be the 5th national carrier.
Clearwire is also still tiny right now. It'll be late 2010 before they have a good sized network, based on their deployment plan. It'll mainly be a metro broadband service til next year (handsets should arrive around then), but that reduces potential customers for the time being.
The problem is deploying a 4G network is a lot harder, mainly because of the backhaul problem. You can't just hook up tariff'd T-1, like with 2G and even 3G. Serious pipes (fiber or wireless+fiber) are needed to get this traffic to the internet, and that takes time and money.
ATT/VZW's only real customer base is those that think more expensive=better and rural customers.
No doubt many people subscribe to either AT&T or VZW mainly because it's a known brand, or they already get home phone from them. The devil you know is better than the one you don't.
Also, many people in more rural areas can only get service from VZW. There's something to be said for having the biggest network. |
|
| reply to patcat88
I'd agree with that overall. But a few things:
1. The costs of peering links are usually shared by both parties. Certainly when they're upgrading links.
2. As long as both operators peer in enough locations, it doesn't matter which direction the flow is overall, both have to upgrade links if they're saturated.
3. It absolutely helps to own a tier 1 network when you provide lots of bandwidth to customers. But it's hardly the end of the world if you don't. Comcast buys a lot of bandwidth from Level 3, and also Savvis, Tata, and probably Global Crossing, but it doesn't cost that much.
Thanks to the dot-kaboom there are numerous providers out, resulting in a lot of competition. Some providers went bankrupt, did a debt-for-equity swap, emerged with no debt, and were able to price bandwidth for a lot less. As well technology improvements resulting in more bandwidth at less costs. All of these factors push down the price of bandwidth very close to the cost of providing it, and results in cheap bandwidth.
It amounts to maybe a dollar or 2, per HSI customer, per month.
'»bits.blogs.nytimes.com/2009/04/2···-videos/'
'»bits.blogs.nytimes.com/2009/05/0···evision/'
'»bits.blogs.nytimes.com/2009/04/0···of-caps/' |
|
iansltx
join:2007-02-19
Golden, CO
kudos:2 | reply to NormanS
I wouldn't call SBCIS a Tier 1. They're no more a Tier 1 than Comcast. Though of course AT&T WorldNet is. |
|
1 edit | edit: question answered by reading previous posts. |
|
patcat88
join:2002-04-05
Jamaica, NY
kudos:1 | reply to Samsonian
said by Samsonian:said by patcat88:But AT&T and VZs billions are on a downhill coast. We haven't seen that yet. Both of them have been able to keep boosting revenue, profit, margins, ARPU, subscriber count, and all those other financial metrics. We will eventually. I mean the regional unlimited's business model is cherry picking urban areas. The urban areas are the most profitable for the big 4. The regional unlimiteds are as disruptive as Cable and 3rd VOIP to ILECs.
There's a bunch of reasons for this. The most obvious is the barriers to entry. You can't just into the game and start building a wireless network. You need spectrum licenses from the government, which don't come cheap. And building a network requires lot of capital. Not that many people have billions lying around, and the desire to do this.
The regional unlimiteds don't plan to expand the same way as an incumbent cellular has.
The regional CDMA unlimited carriers have done a decent job so far though. But, their growth has slowed dramatically since Boost Mobile (on Sprint's iDEN network) and T-Mobile have launched aggressive prepaid plans of their own. Both of which are national carriers.
Growth slowed on purpose. I don't remember how many AWS cities they have yet to launch, but most of them seem to have launched.
Cricket/Leap, MetroPCS, and Revol should merge already. They could fit their networks together like a jigsaw puzzle, achieve greater scale, have a network that is somewhat national in size, and be the 5th national carrier.
Bad idea. Cricket and MetroPCS, and Cricket and Revol overlap in a couple markets. They have near/identical prices, but still, merging is worse for competition. Their target demographic doesn't want endless coverage to roam in. You HAVE to roam to go between markets. I believe at one point (or still?), you had to pay extra to roam out of your local market to another market of your regional unlimited.
The problem is deploying a 4G network is a lot harder, mainly because of the backhaul problem. You can't just hook up tariff'd T-1, like with 2G and even 3G. Serious pipes (fiber or wireless+fiber) are needed to get this traffic to the internet, and that takes time and money.
I do wonder what Clear's main idea for bandwidth is? 100K construction cost plus 10K a month for a ILEC T3, $200/megabit/mo, monthly fee from clear subscribers can't cover. |
|
patcat88
join:2002-04-05
Jamaica, NY
kudos:1 | reply to Samsonian
said by Samsonian:I'd agree with that overall. But a few things: 1. The costs of peering links are usually shared by both parties. Certainly when they're upgrading links. 2. As long as both operators peer in enough locations, it doesn't matter which direction the flow is overall, both have to upgrade links if they're saturated. Well how often are they balanced? I would assume most Tier 2/3s have to discount their cost to compete with the "more reliable" Tier 1s, so Tier 2/3s are filled with servers uploading. Tier 1s discount their bandwidth to consumer ISPs or have more clients so they suck traffic. When the unbalance reaches a certain ratio, it turns into a for-profit connection and stops being free peering. Plus usually a Tier 2 will use a Tier 1 for transit (and a default route) anyways preventing peering with it, and then use an IXP to peer with every other Tier 2/3 at that IXP (birds of a feather flock together).
All of these factors push down the price of bandwidth very close to the cost of providing it, and results in cheap bandwidth.
It amounts to maybe a dollar or 2, per HSI customer, per month.
$2*14 million=$28 million dollars.
Hmmm »www.nasdaq.com/asp/ExtendFund.as···ed=CMCSK Comcast's gross income is $35 million.
Not sure what to think (your bandwidth estimate very high?). |
|
NormanSPremium,MVM
join:2001-02-14
San Jose, CA
kudos:4 Reviews:
·SONIC.NET
·Pacific Bell - SBC
| reply to iansltx
said by iansltx:I wouldn't call SBCIS a Tier 1. They're no more a Tier 1 than Comcast. Though of course AT&T WorldNet is. There is no more "SBCIS", only "ATTIS". My point is, SBC owns AT&T. All of it. It is, now calling itself AT&T.
The other side of that coin is that, even if Comcast bought a Tier 1 network, it would probably not change much in the way Comcast operates. AT&T hasn't commingled their ATTIS transit network with their ATTW transit network. Nor, I imagine, would Comcast be any different with their 'ibone', and any Tier 1 transit network that they might acquire.
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum |
|
