Reviews:
 ·Verizon FiOS
 ·voip.ms
·PHONE POWER
 ·Time Warner Cable
| I read through their 8-k, CASH, CASH, CASH Interesting things abound:
1. They said video programming costs went up 3.1% for the year and from their sub units that means weighted the cost goes up 1.5% (almost half of the sub units are video).
2. However voice costs went down 11% with 17% of sub units means that costs went DOWN 1.9% there overall.
Now video programming was 4billion where they brought in 10.6 billion in there. Voice was $600m so it's not a total offset. However nowhere in the statement is what the capital expenditures or opex were for HSI, because if they put it in there people would be spitting their coffee out on how cheap it is to the $4b in revenue.
They mention VOD is down (surprise), total capital expenditure was $2billion, so I'm not going to decode the ring however I assuming that WORST case $1billion on CapX for network in total (docsis, HSI, voice). Of course there is SGA (emp costs up 6%), but OMG...printing money. Now not outwardly (they mention it) in there is the higher HC cost for Navisite (6 figure guys), not your average pole guy.
Their FCF Is $2.7billion for the year (real $$$) UP 20% and this is with them TRIPLING pension funding this year. This brings cash on hand from 2-5 billion in ONE YEAR.
They tout in there additional revenues from equipment fees are good. Not really stated in there is business services (basically Navisite) which is becoming quite profitable (they paid almost nothing for it).
So it looks like docsis 3.0 upgrade cost them minimal(cap expenses remain the same), well of course this means that network costs went down dramatically.
So all this squabbling about programming costs, we are talking about 1.5%, and network and voice costs WENT DOWN.
I wont even get into all the dividends and share repurchases which tallys to approximately $20 per month on everyone's bill (triple play or not).
So the moral of the story is that these companies are reaping the rewards of lower telecom costs and MARGINAL programming cost increases and raising your rates 4-8% (or more). Not a bad deal.
HSI costs are left off because they know there will be a massive uproar if they try to cap when the costs (transit, equipment) are plummeting every year. I know from a few companies that I worked with we are talking about 30% lower network costs for 80% MORE bandwidth at the same time. 10G prices have come WAY down. |
