Investment

» SteveT - More Telecom Consolidation

In response to More Telecom Consolidation posted by Kirk:

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http://telephonyonline.com/mag/telecom_c...

Consolidation isn't cramping competitive style
By Carol Wilson

Mar 12, 2007 12:00 PM

Consolidation was expected to wreak havoc in the competitive telecom industry as the largest carriers stopped buying wholesale services from others in favor of moving more of their traffic onto their own networks. But judging from the activity in the meeting rooms at CompTel, held in Las Vegas last month, consolidation isn't crushing competitive carriers, just making them more creative.

"This industry has 100 to 200 players who are all buying and selling from each other," said Steve Hilton, Yankee Group analyst. "Their future needs are driven by ubiquitous connectivity. That drives buyers and sellers to new solutions."

Increasingly, those new solutions are IP-based, said Craig Clausen, senior vice president of New Paradigm Resources Group, which just issued its latest competitive carrier report. And today's competitive carriers keep a much closer eye on operating costs and maintaining profitability, he said.

"But they are also getting back to their roots of being competitive access providers," Clausen said. "They are recognizing there is value on the wholesale side, especially if they can help each other bypass the incumbents."

One emerging trend in wholesale is to offer end-to-end services that combine metro and access facilities with the long-haul network. XO Communications launched a nationwide wholesale offer (see story on page 14), and Qwest Communications used CompTel to discuss the recent FCC ruling that allows it to see long-distance and local services together for the first time.

"As the customers come to us and have a strategic plan, we can now address their metro, local and long-haul needs," said Roland Thornton, Qwest's executive vice president of wholesale markets. "We can look across our entire portfolio, and we are the only ones with that kind of latitude."

Even with that forbearance, Verizon Partner Solutions is looking at its pricing of services and building a national pricing strategy. "Our customers have been calling for a single national service," said Quintin Lew, vice president of marketing and sales for Verizon Partner Solutions,. "Right now, we have different cost structures in different regions of the country based on the legacy regulatory world. By April, we will have a national plan so that customers who use our services nationwide can have a single plan that covers our entire footprint."

Verizon can then offer them volume discounts on that plan, based on their volume commitments, Lew said.

The end-to-end trend makes sense, said Cindy Whelan, an analyst for Current Analysis, because it enables wholesalers to capture more traffic. "Nobody goes everywhere - not even AT&T and Verizon," she said.

The end-to-end offers reflect a broader trend, Hilton said. "I think we are going to see more interesting and unique combinations of wholesale services," he said. "Wholesalers are going to compete more. The sellers of wholesale are also the buyers of wholesale - it's the nature of the beast - but I think they are looking to compete with different kinds of offerings."

And while mass mergers are shifting traffic so that, for example, a wholesaler may lose a big chunk of BellSouth's business when it shifts to the AT&T network, a rise in demand is enabling that business to be replaced, said Courtney Munroe, an analyst for IDC.

"Part of the strategies of these mega mergers has been to save cost, so the traffic will shift," he said. "But more than likely, it is going to pick up somewhere else. There is a lot of demand out there for bandwidth."

COMPETITIVE CARRIER INDUSTRY REVENUE FORECAST BY SERVICE CATEGORY

REVENUE (in millions of dollars) REVENUE CATEGORY 2005 2006 2007 2008 2009 2010
Switched local service 10,044 10,326 10,306 10,203 10,050 9849
Long-distance 2678 2551 2476 2402 2306 2214
Dedicated access & private line 6000 6335 6824 7369 7959 8516
Data 13,057 14,158 15,254 16,398 17,596 18,845
All other revenue 1704 1849 1974 2092 2218 2351
TOTAL REVENUE 33,483 35,219 36,834 38,465 40,128 41,774
Source: New Paradigm Resources Group Inc.

-- posted by SteveT

» davey52 - Jas Jain Contrarian Indicator

In response to Jas Jain Contrarian Indicator posted by Kirk:
" Did anyone add on this signal? " Hello Kirk, No I sure didn't. I'm all ponnied up with a cost basis of 4.5268. Just sitting in rocking chair with my arms crossed. Now I know how my parents felt when I was past curfew:)

-- posted by davey52

» doctorj2 - Jas Jain Contrarian Indicator

In response to Jas Jain Contrarian Indicator posted by Kirk:

Sadly I bought more CACS the day before JJ's post at $4.04. If only I had waited another day for JJ's contrarian post - I could have got CACS about 5% less. Well at least today it closed a few cents above my last buy on 5/16/07. I'm going to wait for JJ's next doom and gloom post on CACS before buying it again. I don't suppose we can use him for figuring when to sell though because he always seems to think stocks and real estate are heading lower. If JJ ever says he's changed his mind and stocks aren't scams afterall I'm bailing out of the market.

-- posted by doctorj2

» codfish - Jas Jain Contrarian Indicator

In response to Jas Jain Contrarian Indicator posted by doctorj2:

05/18/2007 09:42:22 Bought 2000 CACS @ 3.82
This was my last buy in CACS---- Thanks Jas.
I had used a small portion of the proceeds of my sale of oil stocks, which had a gain of 18-52% over a 4-6 month period. I'm looking forward to fall, when oil goes down again and I can buy them back again (maybe CACS will be above $6 and I can use profits to purchase)
Don't worry, though-- all my other purchases in CACS are still in the red

-- posted by codfish

» davey52 - Short Squeeze

In response to Short Squeeze posted by Kirk:

Run Forrest Run !

-- posted by davey52

» doctorj2 - Short Squeeze

In response to Short Squeeze posted by Kirk:

Geez I am almost starting to feel sorry for the shorts. CACS now up 50 cents or 12%! Starting to look like the JJ contrarian indicator is too good to be true.

I'm surprised JJ didn't say anything about VLNC when it hit $1? While it is up more than 30% since then I am still nervous without getting the confirmation of JJ telling us what a scam it is and how it is bound to go lower.

-- posted by doctorj2

» davey52 - Short Squeeze

In response to Short Squeeze posted by Kirk:
This things been hitting the ASK all morning long. Another 1.5M to cover may be a painful ride for the shorts. 'bout time:)

-- posted by davey52

» davey52 - Short Squeeze

In response to Short Squeeze posted by doctorj2:

Took a little off @ 4.92. Bird in the hand thing.

-- posted by davey52

» davey52 - Short Squeeze

In response to Short Squeeze posted by Kirk:
cnnmoney.com; as of May 10-short interest "ratio" of 9.2. Short interest as a % of float, 4.8% . 1.4 M shares. Thanks. Yes, more ammo to work on that cost basis indeed.

-- posted by davey52

» davey52 - Short Squeeze

In response to Short Squeeze posted by Kirk:

oops, I see our data has the same date, different sources. Sorry about that. Got busy real fast there:)

-- posted by davey52