The Old Telcos

The two old Telcos, Verizon and AT&T, seems to have mangled their core business model. Let's start with AT&T. Like Verizon it has a great wireless footprint. It is an operating company, namely, it was SBC after all, knows how to lay wires, connect them, install wireless equipment and the like. Now they want Time-Warner content. Their argument is that Time-Warner seems to be dying amidst the growth of Netflix, Amazon and the like, and that AT&T can somehow magically via its bucket truck mentality revitalize this dying entity. The Government using Antitrust laws, something which I became proficient in some 25+ years ago battling against the abuses of the new Telecom Act which just allowed recombination. In reality the Government may be helping AT&T from destroying itself. If indeed the new players can destroy Time Warner's old business model, then why buy it!

Now to Verizon. The bought Yahoo and AOL. Neither were or are winners. Now they are reorganizing but not really. As RECODE notes:

Guru will run day to day operations of our member (consumer) and B2B businesses and will serve as a member of our global executive team helping to set company culture and strategy. Guru will also be an important part of the Verizon work that is helping both Oath and Verizon build out the future of global services and revenue. As more of my time is spread across strategic Oath opportunities and Verizon, I will be leading our global strategy, global executive team, and corporate operations. Guru will be leading our global operating teams including:

• Engineering & Tech Platforms including DMSComms
• Data and Research & Marketing
• Media Brands, Content Factory, and Media Products & MarketingSearch Partnerships
• Ad Platforms
• Global Sales & Customer Operations, & Ad Strategy, and & B2B Marketing
• Membership 

 Yes folks that is his name. I will leave it there. But fundamentally the core of Verizon as that of AT&T is the wireless franchises. Wireless is key to survival. There is limited competition, growth and margins are guaranteed. So why get into a business you neither understand nor are competent at especially when competitors are dominating the market. And your entry was the purchase of two losers.

In my experience and in my opinion, based on watching these folks up close, somehow reality gets blurred. They all too often get enamored with the glitz and get clobbered with reality. Remember folks, you are just a telephone company, it is in your DNA. You drive bucket trucks, climb poles, and string wires. You are not media moguls.