Wednesday, February 4, 2009

Telecom industry outlook 2009 - Creditsights

--residential lines more more economic sensitive than business lines --non local services are more sensitive than local service to recessions. But the relationship breaks down since 1980s, the AT&T divestiture --uncollectible revenue ratio increased in recessions where in 2001 it reached 3%. Geography also plays a factor --the Tele Act of 96 has probably changed the industry daynamics, breaking the boundary of wire vs wireless carriers and also allowing new technology, like Voice-O-IP to flush. The EBITDA margin has keeping shrinking from 50% since 2001 bubble burst to 30%. --during time of distress, the 1st to cut is CAPEX --weaker playes, like Sprint, will be impacted more --both wireline and wireless growth are slowing --wireless is lossing access to wirless and cables, which enable VOIP --firms are more leveraged than 1990s --FCF/revenue remains strong

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