Rewired And Ready For Combat

[SOURCE: BusinessWeek, AUTHOR: Spencer E. Ante & Roger O. Crockett]
Over the past 10 years, SBC and Verizon have spent tens of billions of dollars building telecom empires so they could dominate the industry. Thanks to their string of megadeals, SBC and Verizon have become far and away the largest telecom players in the land, together controlling nearly two-thirds of all residential phone lines in the US. But cable companies and Internet upstarts are swiping millions of customers from SBC and other old-line phone companies. Of Web-based telephony upstarts, SBC CEO Edward E. Whitacre Jr. says, "They don't have any fiber out there. They don't have any wires. They don't have anything," he argues. "They use my lines for free -- and that's bull. For a Google or a Yahoo! or a Vonage or anybody to expect to use these pipes for free is nuts!" The upstarts using Internet technology to offer comparable calling services at half the price, without owning a single foot of telephone wire. In a recent report, analyst Anthony Noto of Goldman Sachs titled one section on the prospects for phone companies "The roadmap to the destruction of value." He wrote that they could lose 40% of their land-line residential customers over the next 10 years. Verizon's stock is down 21% for the year, while SBC shares have slipped 3%. So what are SBC and Verizon doing about all this? Both say that their futures depend on how well they perform in broadband, wireless, video, and corporate services.
http://www.businessweek.com/magazine/content/05_45/b3958089.htm
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* At SBC, It's All About "Scale and Scope"
http://www.businessweek.com/magazine/content/05_45/b3958092.htm
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* Verizon: Stumbling But Unbowed
http://www.businessweek.com/magazine/content/05_45/b3958093.htm
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