The lure of bundling services has been hanging over the communications industry for the past six years or so, although many companies have been unable to perfect a winning strategy. Bundling brings together services such as wired (local and long distance) and wireless phone service, Internet access, and satellite or cable television services.
My view on the future of the communications industry focuses on one word: consolidation. The trick is uncovering which players will survive this 21st century game of "being all things to all people." Gone are the days of AT&T's
SBC has always been very responsive to trends, and I have been impressed with its partnering with satellite/DISH Network provider EchoStar
The company's earnings in the third quarter came in even with analysts' expectations of $0.38 per share and $0.02 ahead of last year's earnings. SBC's operating margins are now above plan for the year, it has cut the price of growing Wi-Fi service access to a few bucks per month (to supplement its DSL service), and it is also on pace to reach a target of 6 million DSLs (digital subscriber lines) by year end.
I can't say that I'm excited that SBC grew its long-distance voice revenues by 29%, because that market is new to the company but old and tired to everyone else. The key remains bundling; the company penetration of consumer lines with at least one service rose 58%, boosting the average monthly revenues per consumer line 9.2%.
SBC shares have been in a virtual price flatline over the past two years, although they have shown signs of life over the last year (up a healthy 20%). If you're looking for a telecom play, then SBC, with its attractive 4.72% dividend yield, should be considered strongly.
Get off the phone, log off the Internet, change the satellite TV channel, and bundle these other takes:
Fool contributor Phil Wohl spent more than 12 years on Wall Street and dreams of bundling all of his communications services under one bill. He does not own shares of any of the companies mentioned.