Get yourself some Verizon stock while it's still cheap

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<p><em>of course the ultimate recession stock if you guys are looking to buy is still altria(mo). people aren't going to stop smoking and it has huge growth in europe. Just my take guys =) Full disclosure: I currently own MO.</em> </p>

<p>We've been knocked down a bit with tobacco stock with lawsuits. Just a thought to keep in mind.</p>
 
<p>Isn't Altria spinning off Phillip Morris?</p>

<p><a href="http://www.marketwatch.com/news/story/altria-outlines-post-spin-plans/story.aspx?guid=%7B5C539C98-FC6C-4EDE-AA93-6C8B708508B1%7D">http://www.marketwatch.com/news/story/altria-outlines-post-spin-plans/story.aspx?guid=%7B5C539C98-FC6C-4EDE-AA93-6C8B708508B1%7D</a></p>

<p> </p>
 
I had a Razor flip phone with Cingular, and was happy with it. The AT&T merged with Cingular....and I was still happy with it. THEN I had to go and buy the snazzy iPhone (which is so cool, I can't stand it).....BUT, the coverage sucks ! It seems to only have about 3/4 of the coverage/reception strength that I had with the Razor. What gives ?
 
it's the way the phone was designed and depdning on which razor phone you have, you could be using the 3g network(new, faster network) while the iphone is using the edge network(old). the new iphone will be out later this summer which will utilize the new network.
 
<p>My personal opinion is that it is not a good time at the moment to go into the wireless phone stocks at the moment. The industry is in an evolutionary phase, as evidenced by the new networks, consolidation, and some realigning/restructuring that still needs to occur. And this in the midst of a volatile market, I would just lay off of it until some of these things shake out.</p>

<p>If the Alltel-Sprint deal does happen, a fading major player in the industry would be replaced by a new, bigger player and that is a threat to Verizon. AT&T isn't as strong a product as Verizon, but what happens once iPhone/AT&T works out the kinks and iPhone does become the iPod of the phone world (or at least a resemblance of it)? That would put AT&T in a much stronger position. </p>

<p>And from Verizon's standpoint internally, what if the digital phone service they are marketing (and lagging WAY behind AT&T on) just doesn't pan out? The problem I have with Verizon and AT&T going into this service is that there is a disconnect in the value chain of this industry, as the digital phones have always depended on broadband connections for them to work. Until recently, DSL meant a land line, and that eliminated the need for digital phones. Why have 2 phone services? Now, as DSL direct connections (don't need land lines) emerge, this may fill in that value chain. But cable internet is still the king in broadband, so until DSL catches up and becomes near on-par with cable, the DSL-based digital phone providers will continue to be also-rans. So this still remains to be seen as to whether Verizon's digital phone play is a worthy capital investment.</p>

<p>My 2 cents, and it may actually be worth just that.</p>
 
<p>Well, speculation is the point of the post gepetoh, so I welcome your view.</p>

<p>The iPhone deal with AT&T won't be exclusive forever. Apple needed a carrier to test it's product on a full scale, work out it's production kinks, and get some user feedback. It chose the EDGE standard for the data side of the phone because it is the most common globally. AT&T was also willing to kick back a portion of the income from the iPhone rate plans and pay for the advertising. Apple's deal also prohibits them from developing a CDMA version of the phone, which was a big deal before Verizon decided to change to LTE for it's 4G technology, the same technology AT&T will be using. As AT&T only has exclusive rights for a total of 5 years, and Verizon can't even start using the bandwidth in question until after 2/17/09, and Apple will be using AT&T's network to field test all of it's changes, I think that by the time the agreement ends Verizon will be in a strong position to add iPhone owners to it's list of customers and a simple update from Apple will make that possible.</p>

<p>As for the digital phone business, I expect AT&T will stumble and fall far behind. One, they are too focused on IPTV and two, they have <a href="http://arstechnica.com/news.ars/post/20070510-verizon-comcast-pump-up-the-bandwidth-wheres-att.html">bandwidth issues built-in to their network</a>. Verizon and Comcast (and other cable internet providers) will remain on par with each other, allowing their digital phone service to grow past AT&T's capacity. </p>

<p>Eventually it will all be moot I think... eventually broadband wireless access in the 700Mhz spectrum will allow you to skip the cable modem in favor of a celluar one, and cell phones will be able to seemlessly switch between conventional wireless towers and localized wi-fi networks. T-mobile currently offers a service and phones that can use either (but not without dropping the call to switch between the two) and I expect that technology, in some form, will become ubiquitous in the future. Imagine, you have company "Z" for TV, Internet, and phone service: your home network is one box that provides wireless access to digital TV signal, digital telephone service, and internet access. Your new iPhone acts as a digital phone whenever you are near any company "Z" wi-fi point (at home or elsewhere) and as a cellphone anywhere else, your computers can access th internet and act as a TV anywhere you get company "Z" wi-fi access (at home or elsewhere), and your HDTV can access the internet and/or your 'networked' computer's drive while watching your favorite program in the split screen and recording any number of others on a 'networked' DVR. </p>

<p>In some form or another, all these pieces of technology exist today. Based on what is common and public information, Verizon is the one company that is positioned to put them all into one package. They have the customer base, they have the bandwidth, they have infrastructure, they made the choice on compatible technology, and now they have the spectrum. They also have a stock price that is down 20% off it's 52-week high.</p>
 
nude is right about the technology.



remember you're buying these two companies for dividend yields and their ability to pay those yields. That's why these companies are great buys at this time in the economy, not so much of who is the better cell phone provider or future technology as much.
 
<p>Yep, they have a nice little dividend machine. Not extremely high but given a few 100,000 shares they might be ok.... for me its more of a VERY long term goal, they jumped a little bit today, but its still a pretty good bargin long term. </p>

<p> </p>

<p>Nude, </p>

<p> Very nice write up! Its nice to see the technical side mixed with company/stragetic planning. good luck</p>

<p>-bix</p>
 
"BUT, the coverage sucks ! It seems to only have about 3/4 of the coverage/reception strength that I had with the Razor. What gives ?"



Strange, my iPhone has far superior reception when compared to the Samsung Syncs I have on AT&T.



"It chose the EDGE standard for the data side of the phone because it is the most common globally"



At least according to public statements Jobs has made, Apple chose EDGE because 3G was 1) not available in enough areas in the U.S., but more importantly, 2) 3G eats up quite a bit more power than EDGE and they were still working on optimizing battery life.
 
<p>Well, Mr. Jobs can say what he wants, but the truth is that Apple chose a tech that didn't artificially limit the number of handsets they could sell upon release. Optimizing battery life in a world with endless recharging options? Whatever.</p>

<p>GSM as a 'voice' technology is now everywhere and <a href="http://www.gsmworld.com/roaming/GSM_WorldPoster2008A.pdf">this map shows that (warning: 27MB pdf)</a>. The 'data' part of GSM was originally GPRS and was quickly upgraded to EDGE (Enhanced Data rates for GSM Evolution) and represents the bare minimum for acceptable data speed over a GSM network, like 56k dial up speed is for internet access. From there, technology advanced faster than networks could upgrade equiptment and you ended up with a world-wide hodgepodge of standards that work on GSM- and CDMA-based networks. A nightmare for anyone designing a data-using device, and a horro show for companies trying to build networks that met consumer demand. Which is why some cities get 3G data speed and some cities don't. The next, or 4G, standard won't have a division between 'voice' and 'data', they will both be 'data' from handset to tower and the network will convert the data packets to voice (as needed) somewhere downstream.</p>

<p>Apple had a choice between a) waiting for a final standard to be adopted, tested, introduced into service, and then built-out; or b) going with a standard already in place on 95% of the GSM networks around the world; or c) going with a high-speed standard that is already being skipped over by every major carrier around the world. Battery life wasn't more than a passing concern.</p>
 
<p>Nude, </p>

<p> Yep, the only real issue I see with this technology and battery life are stuff like satellites and stuff like HUMINT or CHATS boxes that used to be so prevalent (you only get the old stuff that shows up in the internet nowadays...). It will be interesting to see how much the new phones will cost that have 4G standards. What is really funny is to see how the carriers are going to advance their networks to keep up, I'm sure tha by the time everything is up to speed it will be 2-3 generations past. Oh well, it should be interesting.</p>

<p>-bix</p>
 
<p>Bix,</p>

<p>I think you are right, cap expenditures will have to level off after 4G. The last few years have reminded me of the PII, PIII, PIV Intel upgrade period in PCs; every 9 months you could get something twice as fast as what you had, but it required a whole new MB, power supply, and twice the RAM to make it work. Half the reason Cingular purchased AWS was for the new UMTS (W-CDMA) network they were rolling out, yet by the time the buyout was in effect, HSDPA was the new standard. They didn't even get that rolled out nationally when LTE came along. Hopefully it is the Core2 Duo of the wireless world and we can quit worrying about speed and start worrying about coverage and bandwidth and integrating OFDM-based user devices.</p>
 
<p>FWIW, I read yesterday that if you have T-Mobile, call them and announce that you want to end your contract because you want an iPhone and they will offer you all kinds of discounts to stay...is this true?</p>

<p> </p>
 
<p>Peter, it may be true, but it is also true of any carrier, including AT&T.</p>

<p>They all have some sort of retention team that tries to resolve customer issues in order to reduce what the industry calls "churn" and these teams usually have expanded powers to keep customers from leaving. Free cellphones, a few discounts or a free year of some promotion, etc. The downside is that they all require you to re-sign with them for 1 to 2 years depending. Calling up your service provider and asking to cancel will usually get you rerouted to the retention team, but you also run the risk of getting someone who says "Ok, thank you for being our customer, your service will be terminated in when you transfer your number, and your bill will arrive 30 days after your current billing period ends. Have a nice day!" </p>

<p>While they have expanded powers, they also have been trained to calculate the value of what they can offer versus the value of what they make from you. If you are on a $39.99 rate plan and the only thing that will get you to stay is a free $500 phone, they will say goodbye to you and your $40 a month contract. However, if you have a 5-line family plan, spend $250 a month minimum, and you need a new phone, they will be happy to send you the latest and greatest for free... provided you renew your 2 year contract.</p>
 
<p>For those interested,</p>

<p><a href="http://online.wsj.com/article/SB120648766842863793.html?mod=googlenews_wsj">From the WSJ:</a></p>

<p><em>The partnership would create a nationwide wireless network using WiMax technology, which is designed to provide high-speed Web access from laptops, cellphones and other mobile devices, as well as high-quality mobile video. Sprint and Clearwire have been <strong>working for months</strong> to cooperate on a WiMax rollout and are now trying to raise at least $3 billion for a joint venture. Under the plan the parties are reviewing, Comcast -- the largest cable operator with 24 million subscribers -- would put as much as $1 billion into the venture, with No. 2 operator Time Warner Cable adding $500 million. The sixth-biggest cable operator, Bright House Networks, is also involved in the talks and would contribute between $100 million and $200 million, people familiar with the matter said. Comcast Chief Executive Brian Roberts has played a prominent role in the talks.</em></p>

<p><em>...</em></p>

<p><em>Entering the wireless business is becoming a bigger priority for cable companies as they compete fiercely for customers with telecom giants AT&T Inc. and <strong>Verizon Communications Inc</strong>. Those phone companies have encroached on cable's turf by entering the pay-TV business and are positioning themselves to offer a "quadruple play" of services that includes landline phone, high-speed Web access, cellphone, and video. "<strong>That's obviously a concern, if Verizon can put together a converged service offering that starts to peel people away from cable operators</strong>," said Mark Rowland, head of the wireless practice at IBB Consulting.</em></p>

<p>If this group of communication companies have been working for months to put this together, it makes you wonder how close Verizon and AT&T are to actually implementing a challenge to the cable companies. Designing a set of services to run on an existing network is the hard part for Verizon and AT&T, but switching those services from EV-DO to LTE will be a matter of flipping a switch. In contrast, this WiMax coalition will have to co-ordinate services, establish standards in delivery, manage to create a billing system that shares information and bills according to technology/access point/content use/licensing, and all of that is in addition to the infrastructure build-out. I had a front row seat when Cingular began unifying 4 billing systems into one, while simultaneously trying to add a new generation of technology to a nationwide network. Progress was glacial at best and frought with errors and reversions to the old system while problems were resolved. It speaks volumes about the perceived threat to companies like Comcast that they are enthusiastically charging ahead with this venture.</p>
 
<p>Verizon announces planned national rollout of 4G by 2010</p>

<p><a href="http://money.cnn.com/news/newsfeeds/articles/djf500/200804041006DOWJONESDJONLINE000724_FORTUNE5.htm">http://money.cnn.com/news/newsfeeds/articles/djf500/200804041006DOWJONESDJONLINE000724_FORTUNE5.htm</a></p>

<p> </p>
 
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