Done deal! TDMA is a giant loser. How is T to compete? Long distance rates continue to approach the tangential--zero cents per minute for the non-eng in the group. From whence is the additional revenue to come? What can T purchase that will make a difference? I do not really care about any of the answers, just an excerise in business logic--I own no shares, nor am I short any.
Actually, long distance continues to be a steady source of revenue. The problem is that T management needs to more rapidly integrate data, voice, and entertainment transmission. In select markets, Media One has done a much better job of this than T. This is an execution problem. In the long run, businesses and households are going to want to pay one bill for their telecom and entertainment services. T is in a good position (assuming UMG shareholders are still willing to go along with the merger) to bring this about. The future of long distance, as a revenue generator, is probably better than the increasingly pessimistic observations, but it is not a very good stand-alone business. At the end of the day, all these services must be bundled as one. This is why eventually T management must either execute better or they will find themselves on the street (after BTY or some other big European telecom takes advantage of the cheap price T's assets are currently being sold for on the market).
that T must execute better is right on IMO. They are moving at a pace that is even hard to measure. For example, when they announced the AWE tracking stock, it took them months to get it issued, and by the time they got around to it the good times for raising capital were over. Now they are doing the same thing by stringing shareholders along with the promise that we will receive our shares in AWE SOMETIME in the future. The fact is that T is trading at a level that should already reflect the transfer of the shares of AWE.
The lower earnings announcement was the killer though. Nobody wants to buy stock in a company with decling profits. When the profit picture turns aroung so will the share price of T. Anyone care to guess when that is likely to happen