Whoops, We Need Wireless
from the un-spin-that-one dept
Sprint announced a little while back that it would spin off its local phone business as “Embarq”, and today, the CEO of the new company says that after the spinoff is complete, Embarq will offer an MVNO service, including dual-mode cellular-WLAN devices. Obviously there’s a trend among global telecom providers to divest themselves of legacy voice-centric phone networks, but why, then, have the fixed-line company — which has been spun out — offer the branded wireless service? Shouldn’t the remaining wireless company resell wired service if the bundle is so important? Indeed this is the strategy Vodafone is pursuing. The Embarq news is also reminiscent of when AT&T flipped out after they took AT&T Wireless public and grabbed the IPO money, then realized they were let out of the wireless business. Shouldn’t they think through these things a little more before they spin these things off only to put them back together in some way?
Comments on “Whoops, We Need Wireless”
Remember that Dan is former President of AT&T Wireless. He knows the value of wireless.
Spin-offs are a great way for CEOs to distract the media and shareholders from a.) financial problems or b.) strategic problems. As in, “I don’t know what the hell to do in this quickly changing marketplace, but, hey, look over there, I just spun-off division X!!! Isn’t that fascinating?”
Or try the reverse…
“…look over here. We are expanding into new markets and opportunities!”
Honestly, the leadership and major stock holders do not make millions off of your pithy monthly line phone bill. They become wealthy only through stock increases.
Hence the wild fluctations in the market…
Telcos, wireless, squeeze the customer.
The customer wants to get ‘best of breed’ services, partly on cost and partly on quality. And from whom they choose.
Telcos want to bundle increasing numbers of services to maximize revenue per account. And they hate choice.
Cable companies want you to think they are an alternative, BUT they also maximize revenue per account to the detriment of their customers.
Wireless provides the means to escape the last mile problem of how you connect to the internet and escape the two local monopolies.