The Landline Dilemma

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

The Landline Dilemma

As CenturyTel buys up Embarq and Qwest and Windstream buys up IOC's and CLEC's, the question remains: What do you do with all that declining wireline revenue with mounting debt?

Unless 100MB DSL becomes a reality that can be rolled out to 75% of their base, I don't see how these 2 ILEC's pay back the debt.< p/>

Their FTTx strategy is in pilot status. How do they compete against DOCSIS 3.0 from the top MSO's? What happens if they lose 50% of their consumer landline business?

Windstream and CenturyLink are betting on the B2B market. Hoping that more business customers can offset consumer losses. It's possible, but the LEC would have to know where its fiber assets are; which buildings are lit; and other details, which from what I am hearing is far from happening.

There isn't even a cellular replacement product to offset the lost consumer revenue. Although some have speculated that CenturyLink will buy Leap to get a cellular asset. Possible. MetroPCS never picked up Leap or Cricket. It's a dangling asset. But is there enough credit left after the $20+ billion that CenturyLink will be carrying to buy anything else? Or does the ILEC credit card have no limit?

Rural telcos and independent LEC's are experiencing the same issues: How do I provide triple play? How do I compete against cellular? How do I sustain my wireline business model?

For some the answer is to milk the federal subsidy (USF, RUS, NTIA, etc.) for as long as possible. Others seem to think that bigger is better. We'll see.

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