Thursday, December 23, 2010

Broadband Networks: Slim Returns

Wireline networks have the weakest returns on invested capital with a 1.5 percent gain over the last decade, argues Sanford Bernstein financial analyst Craig Moffett.

Wireless networks had a meager return of 0.3 percent. Cable garnered a 2.5 percent return. Satellite networks had the best return on invested capital at 5.5 percent.

At least in part, that's one reason DirecTV shares have trounced other companies in 8-year returns, he argues. Other stocks—AT&T, Comcast, Dish, Sprint and Verizon—have negative returns, says Moffett.

But here’s where the returns get tricky. Once you add up the costs of various telecom deals, the returns look much worse.

1 comment:

Anonymous said...

The reason ILEC revenue is low is because the FCC either gives everything we have away or lets other steal it. Since the 90's the wireless crybaby's have used our networks for free. Next came the VOIP users, and then the phantom guys who just plain steal from us. What business can survive with the government mandating that it give it's services away? Wake up people.
The only reason IP is so popular is because no one has to pay for most of the technology being used.

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