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- 10-23-2003, 06:45 PM #1CraigGuest
I posted the following message on 6/6/2003. Even with all this new
advertising and network improvements, they still suffered on lower
additions and higher churn. Not meant to be a flame war See link
below along with message.
http://groups.google.com/groups?q=au...le.com&rnum=31
Isn't it somewhat of a "snowball" effect? Lets assume Verizon has the
upper edge right now, so they are gaining more subscribers than the
other carriers. Now more subscribers means more revenue. More
revenue, in turn, usually means more profit, more money to invest in
their network (make sure there is enough capacity to handle new
subscribers, better coverage, better advertising, etc). Due to
economies of scale, they will be able to decrease their rates slightly
as well (if they so desire). Mainly though, better coverage, better
advertising, etc, will result in even more subscribers, more revenue,
etc and where do you think most of these customers are coming from?
Other carriers. The initial "snowball" is rolling down the hill
and getting bigger while completely destroying its competitors.
Now for some of the other providers that are losing ground. It's a
reverse snowball effect, so to speak. Churn or less subscribers
results in less revenue. Less revenue often means less capital
spending, less advertisments, etc. These companies are just trying to
keep their heads above water, but when you are losing customers you
don't have the cash flow to keep anything up. Because you are losing
customers you cant afford to enhance your network, because you can't
afford to enhance your network, you lose even more customers. It's a
downward spiral. They just cant seem to keep up with the juggernaut.
They would have to leapfrog a huge distance to just get to an even
playing field with the juggernaut.
So I guess my question is, how can you break this kind of cycle? How
can you prevent major problems with the other carriers when a clear
leader begins to emerge from the pack, even if it is slight? It seems
that once a leader emerges, even if it is only moderately better than
its counterparts, will cause a lot more damage to the other carriers
than people think.
--------------------------------------------------------------------------------
› See More: SPCS loses big on Wall Street Today - Verizon Snowball
- 10-23-2003, 09:19 PM #2Steve CrowGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
I didn't feel like reading your whole post (sorry) but I think you'll find
it interesting to know that Verizon Wireless does in fact have one
KICK-ASS ad campaign coming up. Not sure exactly when it's supposed to
launch, but I have seen some of the materials and a couple of the
commercials, and they are really good. I am not at liberty to say what
they're about, but let's just say... they'll make the shortcomings of
their competition very obvious.
I would expect to start seeing them run any day now.
Steve
On Thu, 23 Oct 2003, Craig wrote:
> I posted the following message on 6/6/2003. Even with all this new
> advertising and network improvements, they still suffered on lower
> additions and higher churn. Not meant to be a flame war See link
> below along with message.
>
> http://groups.google.com/groups?q=au...le.com&rnum=31
>
>
> Isn't it somewhat of a "snowball" effect? Lets assume Verizon has the
> upper edge right now, so they are gaining more subscribers than the
> other carriers. Now more subscribers means more revenue. More
> revenue, in turn, usually means more profit, more money to invest in
> their network (make sure there is enough capacity to handle new
> subscribers, better coverage, better advertising, etc). Due to
> economies of scale, they will be able to decrease their rates slightly
> as well (if they so desire). Mainly though, better coverage, better
> advertising, etc, will result in even more subscribers, more revenue,
> etc and where do you think most of these customers are coming from?
> Other carriers. The initial "snowball" is rolling down the hill
> and getting bigger while completely destroying its competitors.
>
> Now for some of the other providers that are losing ground. It's a
> reverse snowball effect, so to speak. Churn or less subscribers
> results in less revenue. Less revenue often means less capital
> spending, less advertisments, etc. These companies are just trying to
> keep their heads above water, but when you are losing customers you
> don't have the cash flow to keep anything up. Because you are losing
> customers you cant afford to enhance your network, because you can't
> afford to enhance your network, you lose even more customers. It's a
> downward spiral. They just cant seem to keep up with the juggernaut.
> They would have to leapfrog a huge distance to just get to an even
> playing field with the juggernaut.
>
> So I guess my question is, how can you break this kind of cycle? How
> can you prevent major problems with the other carriers when a clear
> leader begins to emerge from the pack, even if it is slight? It seems
> that once a leader emerges, even if it is only moderately better than
> its counterparts, will cause a lot more damage to the other carriers
> than people think.
>
>
> --------------------------------------------------------------------------------
>
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- 10-23-2003, 09:49 PM #3Scott StephensonGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
Craig wrote:
>
> So I guess my question is, how can you break this kind of cycle? How
> can you prevent major problems with the other carriers when a clear
> leader begins to emerge from the pack, even if it is slight? It seems
> that once a leader emerges, even if it is only moderately better than
> its counterparts, will cause a lot more damage to the other carriers
> than people think.
>
>
>
--------------------------------------------------------------------------------
The only two things that come to mind are either a complete implosion by
Verizon (more on that in a minute) or a consolidation of the industry.
Consolidation has been mentioned for a couple of years now, and with WNLP
around the corner, we might start seeing this. When all is said and done,
its possible that three (or possibly four) carriers remain. Verizon's debt
load (currently $50B), and the impending departure of Vodafone (a reality
just waiting to happen) would probably leave them out on their own. A
couple of mergers later- Nextel/Sprint, AT&T/t-mobile (as examples), and we
are left with four (including Cingular). This would also put everyone in
the same vicinity as far as subscibers go and level the field a little. It
would also level the network coverage quite a bit, too. At that point,
everyone starts looking the same from a basic service standpoint
(coverage), and the true test of success will be pricing and product
offerings. And at this point, Verizon will no longer be the 800 lb.
gorilla- just another carrier.
As far as a Verizon implosion goes, they face a couple of interesting
situations. First, there is the debt load and financial performance of the
company. They currently have almost $50B of debt on the books, with $10B
coming due within a year. And with their landline business going down the
crapper, they no longer have the luxury of subsidizing Wireless with
landline profits. So, they are in a position where neither division is in
a position to help the other. Yes, Wireless is making money, but not at
the level you would expect with nearly 35 million subscibers. A
comparison, Verizon anticipates about $1B in net income in '04. Not a bad
number, but Nextel had $1B net on the books in the first half of the year,
with 1/3 of the subscriber base. Its an interesting set of numbers, and
makes one wonder about the effieciency of the Verizon business plan.
Another challenge is the potential for Vodafone to walk. Its no secret that
they are very unhappy with VZW, and the number I hear as a first round
buyout figure tops $10B. I'm not sure that investors are going to jump at
the opportunity for Verizon to increase their debt load by 20% (or more) in
return for a very small revenue gain. This, and any capex required to keep
the network technologically current, could be huge hurdles.
Keep in mind that all of this is just the opinion of one man, and is more
observation than anything else.
- 10-23-2003, 10:41 PM #4CAT0NHATGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
> So I guess my question is, how can you break this > kind of cycle?
Sprint could do the following.
1. First by being the first provider to provide good coverage maps, as they
were obligated by the Industry standard consumer code.
2. Improve customer service so:
*2 folks have authority to help
they arent pissing people off by having to
upsell
They arent rushing people off the phone to
"complete the call"
Have a working escalation path.
3. Improve the stores
pay by salary so sales folks dont have incentive
to lie to make sales and commissions
have enough staff so repairs can be done in
Real Time
- 10-23-2003, 10:58 PM #5Group Special MobileGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
On Thu, 23 Oct 2003 23:19:40 -0400, Steve Crow <[email protected]>
wrote:
>I didn't feel like reading your whole post (sorry) but I think you'll find
>it interesting to know that Verizon Wireless does in fact have one
>KICK-ASS ad campaign coming up.
Oh boy! Are they going to have more of the nerdy "Can you hear me
now?" guy? I can hardly wait. The ones that they're showing now
aren't nearly as stupid as they could be.
- - - - - - - - - - - - - - - - - - - - - - - - - -
To send an email reply send to
GSMthemobilestandard ( yahoo.com
- 10-23-2003, 11:28 PM #6Scott StephensonGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
CAT0NHAT wrote:
>> So I guess my question is, how can you break this > kind of cycle?
>
> Sprint could do the following.
>
> 1. First by being the first provider to provide good coverage maps, as
> they were obligated by the Industry standard consumer code.
Accurate coverage maps are on file with the FCC.
>
> 2. Improve customer service so:
> *2 folks have authority to help
> they arent pissing people off by having to
> upsell
> They arent rushing people off the phone to
> "complete the call"
> Have a working escalation path.
Don't you get sick of using this line?
>
> 3. Improve the stores
> pay by salary so sales folks dont have incentive
> to lie to make sales and commissions
> have enough staff so repairs can be done in
> Real Time
They lie in violation of company policy (if they do), and every sales
organization in the industry pays commissions- that is not the problem.
- 10-24-2003, 12:56 AM #7Steve CrowGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
You know, I figured someone would ask. The commercials I saw were only
about 20 seconds long, so there seems to be room at the beginning and end
for a "Can you hear me now" or two. I did *NOT* see Test Guy on any of the
printed literature, which was also still in development, but I seriously
doubt they will drop the Test Guy campaign, which easily goes down as the
most successful ad campaign in the history of any wireless provider.
As much as you and I have had enough "Can you hear me now" I guess we'll
be hearing him for at least a few more months.
The new ads are a really great concept. They will really hit home with
everyone who watches them.
Steve
On Thu, 23 Oct 2003, Group Special Mobile wrote:
> On Thu, 23 Oct 2003 23:19:40 -0400, Steve Crow <[email protected]>
> wrote:
>
> >I didn't feel like reading your whole post (sorry) but I think you'll find
> >it interesting to know that Verizon Wireless does in fact have one
> >KICK-ASS ad campaign coming up.
>
> Oh boy! Are they going to have more of the nerdy "Can you hear me
> now?" guy? I can hardly wait. The ones that they're showing now
> aren't nearly as stupid as they could be.
>
> - - - - - - - - - - - - - - - - - - - - - - - - - -
> To send an email reply send to
> GSMthemobilestandard ( yahoo.com
>
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- 10-24-2003, 04:37 AM #8CAT0NHATGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
[email protected]
attempts to SPIN:
> Accurate coverage maps are on file with the FCC.
but not online on the SprintPCS webpage, or available in stores or otherwise
freely available as the Consumer Code requires
- 10-24-2003, 07:11 AM #9Scott StephensonGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
CAT0NHAT wrote:
> [email protected]
>
> attempts to SPIN:
>
>> Accurate coverage maps are on file with the FCC.
>
> but not online on the SprintPCS webpage, or available in stores or
> otherwise freely available as the Consumer Code requires
Freely available from the FCC online, I believe. And no, I don't have to
provide a link- do some research.
- 10-24-2003, 07:13 AM #10Scott StephensonGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
Steve Crow wrote:
> You know, I figured someone would ask. The commercials I saw were only
> about 20 seconds long, so there seems to be room at the beginning and end
> for a "Can you hear me now" or two. I did *NOT* see Test Guy on any of the
> printed literature, which was also still in development, but I seriously
> doubt they will drop the Test Guy campaign, which easily goes down as the
> most successful ad campaign in the history of any wireless provider.
>
> As much as you and I have had enough "Can you hear me now" I guess we'll
> be hearing him for at least a few more months.
>
> The new ads are a really great concept. They will really hit home with
> everyone who watches them.
>
Then they'll be a lot like the new round of Nextel advertising just
announced (did you really think Verizon was the only one saving all of
their advertising for WNP?).
- 10-24-2003, 07:22 AM #11CAT0NHATGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
>> Accurate coverage maps are on file with the FCC.
>
> but not online on the SprintPCS webpage, or available in stores or
> otherwise freely available as the Consumer Code requires
Freely available from the FCC online, I believe. And no, I don't have to
provide a link- do some research.
==========================
Still spinning. If it was so easy to find on FCC, you would give us a link,
you're just guessing and hoping, I believe. Anyway thats still not the same as
being provided by the carriers to the consumers as required by the code. When
the map is in the store and on the web site, then they have complied with their
own industry consumer code. As of now they are in Clear Violation.
- 10-24-2003, 07:45 AM #12Scott StephensonGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
CAT0NHAT wrote:
>>> Accurate coverage maps are on file with the FCC.
>>
>> but not online on the SprintPCS webpage, or available in stores or
>> otherwise freely available as the Consumer Code requires
>
> Freely available from the FCC online, I believe. And no, I don't have to
> provide a link- do some research.
> ==========================
>
> Still spinning. If it was so easy to find on FCC, you would give us a
> link, you're just guessing and hoping, I believe. Anyway thats still not
> the same as being provided by the carriers to the consumers as required by
> the code. When the map is in the store and on the web site, then they have
> complied with their own industry consumer code. As of now they are in
> Clear Violation.
No Spinning- here is the part of the Code of Conduct applying to maps:
"Wireless carriers will make available at point of sale and on their web
pages maps depicting approximate voice service coverage applicable to each
of the rate plans currently offered to consumers."
At no point in the code is the word 'accurate' used. And before you try to
put your typically lame spin on this, 'approximate' and 'accurate' are far
from the same thing. If you don't believe this, I'll make a deal with you-
you mail me a $100 bill and I'll mail you approximately the number of $1
bills needed to match the $100.
- 10-24-2003, 08:05 AM #13Thomas T. VeldhouseGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
The problem with the borg style of growth you mention is that in the
wireless industry, each carrier has limitted spectrum resources. If Verizon
were to take on too many customers in a given market, they will starter
suffering capacity issues and the customer base will defect. It is for this
reason that Verizon charges some of the highest rates around, they are at
capacity in many areas and don't actually want new customers, they just
don't want other carriers to get the customers .. so it is a catch 22.
Tom Veldhouse
- 10-24-2003, 08:53 AM #14John R. CopelandGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
Now that's really depressing.
I thought they'd ALREADY plumbed the depths of stupidity.
---JRC---
"Group Special Mobile" <look@signature_to.reply> wrote in message =
news:[email protected]...
>=20
>=20
> Oh boy! Are they going to have more of the nerdy "Can you hear me
> now?" guy? I can hardly wait. The ones that they're showing now
> aren't nearly as stupid as they could be.
>=20
>
- 10-24-2003, 09:03 AM #15CAT0NHATGuest
Re: SPCS loses big on Wall Street Today - Verizon Snowball
SPIN. The maps currently available are more generalized and smaller scale than
those that led to the creation of the Consumer Code.
The code does not say overly generalized to be worthless either, but that is
what current maps are.
They omit any swiss cheese hole smaller than 20 miles across, when the carriers
can easily do better.
No carrier has yet come up with a new improved map.
And what about the lie you made up about the maps being available on the FCC
web site.
Worse than SPIN, lies.
But Sprint stock continues to decline today
now at 4.1 down another 5% on top of yesterdays crash.
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