Chapter 688 They Are Here
Eric opened the information handed over by Chris and read it. `
Compared with the telecom industry giant at-t, which has a market value of more than 800 million and an annual profit of more than 400 million, the situation of the other two large telecom companies Verizon and Sprint that are trying to enter the mobile communication market is far worse.
The predecessor of verizon was Bell Atlantic, which was dismembered from the original at-t in the telecommunications monopoly case in 1984. After ten years of development and integration, verizon's current market value is 2.3 billion, but in recent years, verizon has been in a slump in performance. State, last year is a loss of 700 million 5400000 dollars.
In comparison, the market value of sprint from non-Bell series is only 105 billion US dollars. However, sprint's operating conditions are far better than that of Verizon. In 1994, the annual profit reached 808 million 800 million, which may be stimulated by this good performance. , sprint ambitiously wanted to deploy a nationwide wireless communication network, so it frantically shot during the auction of segment a and b licenses, and finally obtained a wireless spectrum license that exceeded the sum of the two telecom giants at-t and verizon , sprint will also bear up to 1.5 billion US dollars in spectrum licensing fees, which is equivalent to the company's net profit for two years when sprint has maintained its current good operating conditions.
After reading the information, Eric almost understands why Chris just said that it is not impossible to pull Verizon and Sprint into the cdma camp. `
Although these two companies are considered giants in the US telecommunications industry, they are far from comparable to their big brother at-t.
Due to several mergers and acquisitions in recent years, Verizon has accumulated a huge debt of 8.9 billion US dollars, which is equivalent to 38% of the company's market value. This is also the main reason for Verizon's consecutive losses in recent years. It has increased its debt expenditure by about 600 million US dollars, and it wants to complete the construction and successful operation of the mobile communication network, and the debt ratio is likely to exceed 50% in the next few years.
And sprint's situation is not necessarily very good, although its original operation is very good, but the company's expansion in the field of mobile communications is too large. The $1.5 billion spending on spectrum licenses and the huge amount of money needed to build a nationwide mobile communication network in the next few years may even make it Verizon's path of continuous losses for a long time to come.
The deep-pocketed at-t can make the decision to choose g technology as its mobile communication network standard without hesitation, without considering that g may be eliminated by the more advanced third-generation communication technology in the future. However, Verizon and Sprint, whose financial situation is very tight, need to carefully consider the cost factor of the technology standard they choose next in the process of building a communication network. Although cdma technology has not been commercialized for the time being. However, many experiments have proved that cdma has great advantages over the second-generation digital communication technologies such as g in spectrum capacity and network construction cost.
Chris waited patiently for Eric to finish reading the material, and said, "Apart from cdma itself, if Firefly expresses interest in the telecom industry and publicly spends Qualcomm, there is a very high possibility that Verizon and Sprint will tilt towards cdma, Because with the further expansion of the debt burden of the two companies, whether it is debt financing or equity financing, the difficulty of obtaining funds will be greatly increased, while Firefly has the abundant funds that they desperately desire, even if we do not Instead of providing direct financial support to these two companies, they will also tend to cooperate with Qualcomm, which has the strong backing of Firefly."
Eric nodded, leaned his body on the sand, and rubbed his fingers lightly on the information in his hand, but some other thoughts came into his mind.
In any country, the telecommunications industry is in the monopoly of some giants, if not for the famous telecommunications antitrust case in 1984. At-t will definitely be the company with the highest market value in the United States. Even if seven subsidiaries were split off at the beginning, at-t with a market value of more than 800 million US dollars is still the top five corporate giants in the United States. The market value of the number one General Electric is only more than 900 million US dollars.
Although in the United States, the monopoly of at-t is not born with administrative support, and even if at-t wants to expand further, it will be restricted by the federal anti-monopoly department, but even after a large-scale dismantling The actual monopoly of at-t is also difficult to be broken. Because after more than 100 years of at-t exhibitions, it has a complete nationwide fixed-line telephone communication network, which not only costs a lot, but also cannot be easily built in three or five years. Many emerging companies want to develop their own telecommunications business, and most of the time they even need to lease communication lines from at-t. In this case, it is basically impossible for latecomers to catch up or even go beyond at-t.
But there are things that have seemed remote in previous decades. With the arrival of the new wave of technology, there have been two important opportunities to break the industry pattern, the rise of the mobile communication industry and the network broadband industry. At present, these two industries are just in their infancy. Except for Eric, a traveler, no one knows what kind of scale these two industries will develop in the future, but Eric is very clear that twenty years later , any one of the two major industries of mobile communication and network broadband will be far more than the fixed telephone business that at-t relies on to maintain its monopoly position at this time. Even before Eric's rebirth, many families have no longer Landline telephones are installed, but mobile phones and broadband have gradually become necessities in people's lives.
Although the recent c-segment license auction has been delayed due to the absurd lawsuit, it indicates that there are still many explicit or implicit industry barriers for latecomers to enter the telecommunications industry. But these barriers are nothing to Eric, who already has huge capital in his hands. In some online game terms of later generations, he doesn't have to start from scratch like those novice village trumpets, but can buy it with money. A good high-level account directly enjoys the fun of the game, and at this time, he has two good 'game accounts' in his hands.
Eric still knows some of the future prospects of these two companies. Verizon, sprint and at-t will be the three giants in the US telecommunications industry in the future. He guesses that the future situation should be three companies, especially Verizon and Verizon. Sprint is now sparing no effort in the layout of mobile communications. At this time, other telecommunications companies in the United States that are comparable to Verizon and Sprint, such as Bell South, Northern Telecom and other companies, should also be missed because of this important industrial change. The market is eliminated or absorbed by other enterprises.
Moreover, because paying for the licensing fees for spectrum licenses and building a nationwide mobile communication network requires huge funds, now is the best time to invest in these two companies. Eric knows that this should also be the last moment. It will be difficult to have another chance because of the arrival of the new technology wave. When the Nasdaq index starts to soar wildly in the next few years, whether it is Verizon or sprint, it only needs to sell a small amount of stocks in the circulating market to raise enough development. Funds, so it is impossible to introduce major shareholders like Firefly who have changed the company's equity structure. Even if they want to, Firefly will not be able to come up with enough funds when the market value of the two companies has skyrocketed.
Seeing that Eric was suddenly lost in thought, Chris waited patiently for a while before asking, "Eric, what are you thinking?"
Eric came back to his senses, raised the information in his hand, and asked bluntly: "Chris, which of the two companies, Verizon or Sprint, do you think is more likely to accept our investment?"
Chris raised his eyebrows. Just as he was about to speak, the intercom near the two beeped a few times. Eric got up and pressed the call button to respond, and the voice of the manor's guard came from inside: "William Mr. James, Mr. Jacob and Mr. Salmasi have arrived." (To be continued.)
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