Landline May Need A Lifeline

November 14, 2003

in VoIP, Wireless

Combine disruptive innovation, expensive upgrades, overvalued balance sheets, stratospheric sales and marketing costs, old technologies and trouble is on the horizon. This comment is on the numbers….

The leapfrog effect where one technology makes the next obsolete can work in two ways. The new technology can be so much better that it really undoes the primacy of the former. Or, the new technology can screw up the financial rationale keeping the old tech companies afloat.

Meanwhile, new phone companies, like the wireless kids and even some long distance carriers, get the same switching functionality for millions less. This adds up to a multi-billion dollar loss in competitive (dis)advantage for every landline company. And none of this appears (yet) to be calculated into their stock prices. Once it is….


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