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« Want fios?blah blah »
This is a sub-selection from Follow the money


mech1164
I'll Be Back

join:2001-11-19
Lodi, NJ
reply to Crookshanks

Re: Follow the money

said by Crookshanks:

said by mech1164:

And now with their capitulation with Cable, FIOS is not going anywhere anymore. Will it come back?

To be sure, there is money to be made on the wireline side of things, but there isn't as much growth potential as with wireless. Most people who are willing to sign up for a triple play already have, so at this point the only way to expand your customer base is to engage in a price war with the cable companies. Such a price war isn't necessary in wireless, not yet anyway, because it's still a growth market. You don't have to undermine your competition when there are plenty of new customers to go around for everybody.

The wireless market will mature by the end of the decade, perhaps sooner, and at that point Verizon will have the spare capital to put back into the wireline network.

First you just made my point. They DON'T want to compete period.

Second if you do believe this I have a Bridge to sell you CHEAP!

Crookshanks

join:2008-02-04
Binghamton, NY

1 recommendation

said by mech1164:

First you just made my point. They DON'T want to compete period.

Why should they pour resources into a market with a lower ROI than they can earn in the wireless market? It's a for-profit corporation, not some sort of altruistic enterprise that exists to ensure that every American has access to FIOS.

The economics of the wireless industry will change as the market matures, and I'd be willing to wager that they'll turn more of their energies towards landline as that happens. Business needs to expand, or die, as the growth potential of wireless comes to an end they'll seek out other avenues to grow their business. Landline is the logical place for them to do this, they already have the know-how, and the underlying infrastructure is already in place.

CXM_Splicer
Looking at the bigger picture
Premium
join:2011-08-11
NYC
kudos:2
I thought VZ and Cellco were two separate companies... why is VZ pumping money into Cellco rather than invest in its own business?

openbox9
Premium
join:2004-01-26
Germany
kudos:2
Cellco Partnership (d.b.a. Verizon Wireless) is a majority owned subsidiary of VZ. As a holding company, VZ consolidates Cellco's financial accounting with its own. Money flows both ways.

CXM_Splicer
Looking at the bigger picture
Premium
join:2011-08-11
NYC
kudos:2
That sure doesn't sound like two separate companies to me. Where did the baby bells, that Verizon if formed out of, get the money to purchase/expand their wireless divisions? And where did Verizon get the money to purchase the US portion of Vodaphone?

openbox9
Premium
join:2004-01-26
Germany
kudos:2
It's a partially owned subsidiary.

I'm not sure what you're asking regarding the financing of the business operations. Shooting from the hip I would suggest the financing came from multiple sources, to include cash reserves and debt and equity offerings. I'm sure there's more in the mix, but that's a start.

CXM_Splicer
Looking at the bigger picture
Premium
join:2011-08-11
NYC
kudos:2
quote:
I'm not sure what you're asking regarding the financing of the business operations.

Just keeping in line with the thread and following the money. The simplest answer to my question is 'from the wireline divisions' which further illustrates that, even though it is a partially owned subsidiary, the US portion of VZW is not somehow separate from VZ (which it is often touted as being).

openbox9
Premium
join:2004-01-26
Germany
kudos:2
said by CXM_Splicer:

The simplest answer to my question is 'from the wireline divisions' which further illustrates that, even though it is a partially owned subsidiary, the US portion of VZW is not somehow separate from VZ (which it is often touted as being).

That is a simplistic, yet not totally accurate answer. VZW is a subsidiary, primarily owned and managed by VZ. Legally, it's a separate company. Operationally, the two are intertwined to the point that there's not a whole lot of distinction between the two. Then again, I think you understand all of this.