Thursday, July 24, 2008

Why Telcos Are Going Down?

Was wondering about AT&T (T), Verizon (VZ), Comcast (CMCSA) lately. First two are constantly pimped by everybody. Both have exiting new products: iPhone for AT&T and FiOS for Verizon. Verizon is also a local phone monopoly, i.e. recession-proof. Both have 5% yield, growing earnings and rock solid financial positions. Comcast is a cable monopoly, constantly raising prices, growing earnings and also has rock solid financials.

I can make a case against AT&T and Verizon. They receive significant part of revenue from phone services to enterprises. It might be a news for many people, but small and medium businesses are switching long distance and especially international calling to the Internet. Some even completely switched phone systems to Internet. But VZ and T are also Internet providers. And Comcast provides no phone business to companies and a big Internet provider. Mystery.

If anybody has a clue, let me know. I'm going to investigate this myself and if I find anything, I'll publish it.

Full disclosure: at the time of publication author had no positions in any stocks mentioned. Positions can change any time.

Disclaimer: This article is not intended as an investment advice. Every person should make her/his own investment decisions based on all available information and advice from her/his own financial advisor.

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