Data Shows VZW's Costs for Transmitting Data are Going Down as Customers Pay More

[kodiak799]

I refuse to believe that it takes more than two years to recoup investment cost. Does anyone know the cost of for the building our 4G network?

It takes a lot longer than two years to recoup that investment. Their LTE buildout is costing TENS OF BILLIONS - they have over $50B in DEBT on their balance sheet. They're in the process of completing a deal for $4B, and that's just additional spectrum from cable companies.

So typical for people to assume a fraction of what it actually costs and then whine about what they think is an unfair price.

 

[kinfolk248]

It takes a lot longer than two years to recoup that investment. Their LTE buildout is costing TENS OF BILLIONS - they have over $50B in DEBT on their balance sheet. They're in the process of completing a deal for $4B, and that's just additional spectrum from cable companies.

So typical for people to assume a fraction of what it actually costs and then whine about what they think is an unfair price.

where are you getting these numbers?

 

[comk4ver]

He got it from the fourth quarter financial paperwork. I would like to point out that also money actually spent this year was a mere $16.2 billion. To run Verizon it cost 30 billion. Verizon made 115.8 billion off all their customers that includes fios, mobile and landlines. So if Verizon really wanted they could pay off their debt and still keep 19.6 billion but refuse to do so. Instead they want to pass along their debt to us and keep their profits while claiming that it's too expensive for to give you a better data service.

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[kodiak799]

They have other overhead - wages, health insurance, pensions, store rentals, maintenance costs. Oh, and their investors require a return (dividend yield is 4.8%)

Normally I look at free cash flow. The past 3 years, they averaged about $31B a year. But that's before capital investment, and it's a capital intensive industry. Their capital investments (including maintenance) have averaged $18B a year. Another $5.5B in dividends. So it would take them @7 years to pay off their debt. Current assets basically cover current liabilities - so they aren't exactly swimming in it.

Not a balance sheet that remotely reflects gouging customers. You want to see truly strong balance sheets go look at Apple, Google or even Microsoft.

 

[94lt1]

Keep in mind, they closed a bunch of call centers, they're streamlining their cs costs all the time.

Also, their cutting back on what they want to pay for tower use, meanwhile increasing demands put on tower providers... the only exceptions being.. if they can bypass the tower effectively... then they're obviously just walking away and sticking antenna arrays in church steeples or clock towers...

Vzw has cut their overhead a lot this last year.

 

[kodiak799]

Vzw has cut their overhead a lot this last year.

Yes, they have...because they AREN'T making money hand over fist. It's a volume based business - $2.4B in net income across 100M+ subscribers is about $2/month profit per customer. But to hear people talk they make 10x that.

 

[jseah]

Not a balance sheet that remotely reflects gouging customers. You want to see truly strong balance sheets go look at Apple, Google or even Microsoft.

You mean like the more than $100 billion Apple has on hand in cash?

And yet no one is screaming that Apple should lower their prices because they're gouging the public.

 

[comk4ver]

You mean like the more than $100 billion Apple has on hand in cash?

And yet no one is screaming that Apple should lower their prices because they're gouging the public.

Ironically yes investors have been calling for a cheaper iphone in order to make more money Apple of course didn't feel that was the right approach.

 

[Mfinchv1]

Dish is starting a lte cell network..as competition as well...should be good. Dish says low payments...unlimited data...of course its gonna take a few years to get it built!!!

 

[Narsil]

Dish is starting a lte cell network..as competition as well...should be good. Dish says low payments...unlimited data...of course its gonna take a few years to get it built!!!

Someone needs to photoshop an 18" satellite dish antenna onto a cell phone and call it Dish's first phone. :biggrin:

 

[FoxKat]

Just because the cost of transmission (i.e. marginal or variable cost) is decreasing says nothing about the fully loaded cost (including investment) to provide service.

+1 ^

Sent from my DROID RAZR using Tapatalk 2

 

[52brandon]

They have other overhead - wages, health insurance, pensions, store rentals, maintenance costs. Oh, and their investors require a return (dividend yield is 4.8%)

Normally I look at free cash flow. The past 3 years, they averaged about $31B a year. But that's before capital investment, and it's a capital intensive industry. Their capital investments (including maintenance) have averaged $18B a year. Another $5.5B in dividends. So it would take them @7 years to pay off their debt. Current assets basically cover current liabilities - so they aren't exactly swimming in it.

Not a balance sheet that remotely reflects gouging customers. You want to see truly strong balance sheets go look at Apple, Google or even Microsoft.

well of course. The board, and Corporate officers also collect a wage and get benefits. A very high wage, and amazing benefits. THAT is where the gouging would be most obvious. Something you wont see by looking at a simple breakdown where all salaries/benefits are lumped together


as for their costs going down, and price going up. Yup. They took my free nighttime/weekend minutes that I got when I signed up (and I never renewed so they couldn't take my data, and I assumed that promotion as well). T-Mobile's $70 monthly unlimited everything (with no data throttling) is looking mighty appealing to me now. Shame. I've been with VZW about 8 years and love their service. But their business practices are really pushing me away

 

[kodiak799]

well of course. The board, and Corporate officers also collect a wage and get benefits. A very high wage, and amazing benefits. THAT is where the gouging would be most obvious. Something you wont see by looking at a simple breakdown where all salaries/benefits are lumped together

LOL....that's a mere pittance of $115B in revenues. Board members don't make anything like what you are saying, either. Allow me to educate you - you can find executive and board member comp in the 10k. Total exec comp (top-8 or so) is about $100M (in-line with most companies that size). Directors on the board receive annual comp @ $250k (including stock options).

So the consumer is "gouged" to pay these "ludicrous salaries" to the tune of about $0.08 per month.

 

[Asharad]

Total exec comp (top-8 or so) is about $100M (in-line with most companies that size). Directors on the board receive annual comp @ $250k (including stock options)..

Verizon's CEO in 2011 earned $5.66 million in total compensation.

 

[SunsNut]

Well we won't be renewing our contract with Verizon since I believe there will be more options by the time our contract expires. There are a lot of people bailing on VZW. For now I'll continue with my grandfathered unlimited data along with free nights and weekends. I think it's ridiculous the amount of money I pay them each month and, like them, I am doing what I can to cut my costs.