Verizon Communications (VZ)

Verizon Wireless is performing well, but the cost of maintaining network quality and keeping out competition is high. The firm just spent $2.8 billion on wireless spectrum at a Federal Communications Commission auction, primarily adding capacity in areas it already serves.

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11%

agree

18 votes

edit Verizon is putting its money in the wrong place

Top Contributor: Ben Hur Gomez | Created when NYSE:VZ was $41.63 | Edit | History

Verizon is spending a tremendous amount of money to upgrade its fixed-line network and connect customers to that network. Earning a decent return on this investment, given declining demand for phone service and stiff competition for Internet access customers, will be difficult. Its wireline business segment continues to be under pressure as its margins tighten.

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35%

agree

48 votes

edit The death of wireline

Created when NYSE:VZ was $41.63 | Edit | History

Customers are increasingly replacing their traditional phone lines with wireless and data services or switching to competing carriers. Verizon's ability to extract high margins through its phone network is declining. Around two thirds of the fixed-line segment's revenue is still tied to the phone business.

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Verizon Communications (VZ)

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edit Verizon margins under pressure

edit Verizon is putting its money in the wrong place

edit The death of wireline