Many say landlines are a dead business but that is the reason to buy FTR now
Cable companies are steadily losing customers to Hulu, Netflix Apple TV etc.
People are sick and tired of getting ripped off by cable companies.
Sat is a viable alternative BUT louse upload speeds on internet.
As more and more internet TVs come to market, along with internet ready DVD players etc expect cable to accelerate losing customers and wireline companies to pick up those customers as they switch to internet content, 1 bill is always better than two, especially because the cable companies REALLY raise their internet rates when you drop the programming that subsidizes those low rates.
Wireless for the near future (especially in rural areas) is not the answer for streaming HD video (you ever get a dropped cell call?).
Because of these nascent trends, I would say for the next 4-6 years or possibly even longer, this looks like a great business model.
Even if it only trends up 5% a year, or moves sideways, cash flow should continue to support the 8% dividend.
does anyone know what volume of calls , data transmissions are routed over landlines ????
i believe that lands are still performing a vital function and will continue to do so ..
wireless companies can route stuff over lands to keep the wireless from clogging up ..
slower , nonessential traffic will be carried by lands for quite some time
granted , we are not talking about a growth sector,but at least 2 or 3 land carriers will wind up owning all the lands in the country .. they will at least appear to be growing as the consolidation takes place ..
I expect FTR to do quite well for many years , increasing revs and hopefully earnings and be able to start boosting the div in 2012 ..
Well if you listened to the conference call you know that FTR does not want to talk about line loss or HSI loss. We know that in these new VZ acquired areas that they were suffering losses in these areas before FTR took over. We know that FTR wants to push out the areas that can be served by their HSI to increase these numbers. We know that it cost more to provide service to these rural areas. Which makes you think that the roi on this service will be less than in the cities. Maggie and the gang have to show an increase in HSI subscribers at any costs for now. We are getting close to the end of the real second quarter of this post deal company. FTR has to give the market a reason to believe that every thing is going ok while holding on to the "we are still absorbing the VZ properties" card. FTR is on the clock to get moving on the FTR 13 to get those states on the new systems. We have the temp work people that are going to be going off the books unless we can get them to stay. Where will we get the replacement workers with the experience that they have today? FTR has spent money fast to stop the bleeding from VZ's years of neglect to these areas. Maggie promised results, and she promised being an investment grade company when she started this deal. The market and state agencies will be watching and are waiting to see how fast FTR can turn these areas around to a normal running company. This is imperative to this company making money and to keep on paying a high dividend. Its all in the numbers. The cost savings in the synergies of this deal are hard to measure when FTR does not disclose all the facts. The conference call alluded to anecdotal information that FTR has made gains. FTR has had to have maked some gains by the shear number of their bubble force move. This has to be another cost to operations, and if I remember Maggie said that this heightened work force will be in place for 18 months. She did say that she was converting 4 of the FTR states in the beginning of next year. I guess their was problems in WV when they converted to the new systems so will we see the same in these states? Like I said before we have a couple of quarters to get this turned around. The we have the economy that is not soaring right now
I would tend to agree with your post retaoba. More and more people will be cutting their cable cords with advances in internet delivery of their favorite shows. We have streaming Netflix on two of our sets in the house, and we love it. While some would consider the offerings somewhat limited, there is more than enough entertainment there. The long term problem is that 80 % of the shows produced are done by something like six companies. Their production budgets will get squeezed as more people cancel their cable contracts. The explosion of reality TV is the first result of this reduced reliance on the networks. Firms like FTR, who control the lines, will continue to prosper either way.