A Laborious Weekend for Bankers

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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

A Laborious Weekend for Bankers

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A weekend of labor by bankers and telecom execs resulted in two purchases. Verizon finally was able to rest full control of VZW out of Vodafone. However, it cost VZ $130 Billion to do that. Vodafone's 45% ownership of VZW was purchased "for $58.9 billion cash, $60.2 billion stock and $10 billion in other consideration," according to WSJ. This marks the spot where VZW becomes the primary side for VZ going forward. Good-bye telecom (VZB and VZT, and the unions and pensions that go with them).

VZ was sitting on $41B in long term debt before this. Now it will be at almost $100B in debt. How much debt can the telecom industry float?

In the other move, Microsoft acquired Nokia's handset business and licensed its patents for $7.2 Billion. It's hard to figure out what Microsoft is doing. They buy Skype for $8.5B in 2011 and then closes the SDK. It had a deal with Nokia for mobile before. How does buying the division help them at all? Are they just following in Google's steps (RE: Motorola)? And as someone on twitter pointed out, how many Luminas did you see at ITEXPO (or any other conference)?

Sometimes I think that Microsoft is a ship without a rudder. There isn't anyone with vision there.

They have been burning their channel for a while. Remember Response Point? Then they roll out Office365, close TechNet and end of life Small Business Server. Many Microsoft partners have switched to coding, since they didn't become a Microsoft partner to be a sales droid.

Taking ownership of the mobile phone division makes Microsoft look like T-Mobile, a distant 4th carrier trying every trick to catch up to a third place that is too far away from the two front runners to catch up. Motorola, HTC, Samsung, Apple, Blackberry, LG, Kyocera and Nokia are all competing for a share of the global smartphone market. You have to court cellcos. The only plan I can think of that would work for Microsoft-Nokia went after the MVNO market. There are a lot of MVNOs - Virgin, Republic, Tracfone, Ting, H2O to name but a few - could all use some advantage in the market. The Big 4 cellcos get the best handset deals. US Cellular and the MVNOs could embrace Nokia as a market shaker.

We'll see how this deal plays out. Meanwhile, they are still popping bottles at VZW - until they try to float that $50B in debt - then the hangover will set in. $100B in debt... huh?



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