In 2002 we published a paper called the Imminent Collapse of Telecom, after a request from White House Staff. It was looking at several factors; the loss of copper access lines to cable telephony using VOIP, the growth of wireless and the impact of broadband. We were right, and usual we were a few years early and two financial collapses early.
Then in September 2007 we wrote a report on how Verizon would finance their FIOS properties and this was through a sale of central offices. A month ago we remarked how Verizon was lucky to sell of the New England properties.
Today we see Verizon has found a bigger fool to buy the remainder of its junk, namely old un-upgradeable copper! Namely the sale to Fronteir. The release states:
"The operations Frontier will acquire include all of Verizon's local wireline operating territories in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin. In addition, the transaction will include a small number of Verizon's exchanges in California, including those bordering Arizona, Nevada and Oregon."
It continues:
"As of the end of the first quarter, Verizon had approximately 35.2 million wireline access lines in 25 states and the District of Columbia. This includes Verizon's wireline operations in jurisdictions that will not be part of the transaction: Connecticut, Delaware, District of Columbia, Florida, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Texas and Virginia, plus most of California."
This in my opinion is a real greater fool action and an absolutely brilliant move by Seidenberg the absolute genius in deploying a strategy which we proposed seven years ago! It is like that scene from Patton where he wins his battle against Rommel's troops and says "you SOB I read your book..." Did Ivan read my book?
Now what problems remain? Vodaphone and its 45% interest. Analysts have been commenting on Verizon's dividend problem because they now have to pay from dividends out of wireless. Again, and I love to do this, the analysts are just plain idiots! My opinion. Look at what just happened. The declining junk was pushed aside and made someone else's problem and the remaining markets are FIOS triple or even quadruple play markets. So what does Verizon do, it buys Vodaphone in what may be a hostile bid.
Hedge fund guys, watch the dust! At least that is my guess, it is not in any way a recommendation, you take your own risks!
Then in September 2007 we wrote a report on how Verizon would finance their FIOS properties and this was through a sale of central offices. A month ago we remarked how Verizon was lucky to sell of the New England properties.
Today we see Verizon has found a bigger fool to buy the remainder of its junk, namely old un-upgradeable copper! Namely the sale to Fronteir. The release states:
"The operations Frontier will acquire include all of Verizon's local wireline operating territories in Arizona, Idaho, Illinois, Indiana, Michigan, Nevada, North Carolina, Ohio, Oregon, South Carolina, Washington, West Virginia and Wisconsin. In addition, the transaction will include a small number of Verizon's exchanges in California, including those bordering Arizona, Nevada and Oregon."
It continues:
"As of the end of the first quarter, Verizon had approximately 35.2 million wireline access lines in 25 states and the District of Columbia. This includes Verizon's wireline operations in jurisdictions that will not be part of the transaction: Connecticut, Delaware, District of Columbia, Florida, Maryland, Massachusetts, New Jersey, New York, Pennsylvania, Rhode Island, Texas and Virginia, plus most of California."
This in my opinion is a real greater fool action and an absolutely brilliant move by Seidenberg the absolute genius in deploying a strategy which we proposed seven years ago! It is like that scene from Patton where he wins his battle against Rommel's troops and says "you SOB I read your book..." Did Ivan read my book?
Now what problems remain? Vodaphone and its 45% interest. Analysts have been commenting on Verizon's dividend problem because they now have to pay from dividends out of wireless. Again, and I love to do this, the analysts are just plain idiots! My opinion. Look at what just happened. The declining junk was pushed aside and made someone else's problem and the remaining markets are FIOS triple or even quadruple play markets. So what does Verizon do, it buys Vodaphone in what may be a hostile bid.
Hedge fund guys, watch the dust! At least that is my guess, it is not in any way a recommendation, you take your own risks!
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