Some big news went unnoticed last week .
Sprint's earnings nearly quadrupled.
This is fascinating because Sprint, alone among U.S. telcos, has a unique business model, at least in cellular.
It wholesales.
Lots of companies, from Virgin to Earthlink to Disney, have gotten into the cellular game by re-selling Sprint's capacity. They all have their reasons. They all have their own branding, their own marketing, and their own niches.
The point is Sprint is profiting from wholesaling capacity to these companies. Profiting big time.
Why hasn't this been pointed out?
The major U.S. wireline telcos -- Qwest, SBC, Verizon and BellSouth -- fight like tigers against the idea of wholesaling their capacity.
They have spent literally tens of millions (maybe hundreds) over the last few years winning the "right" not to wholesale their broadband to what were thousands of ISPs (and are now 10s of ISPs) anxious to help them make money on it.
How's that going for them? Not well. None of the major wireline companies has reported so much as a great quarter this century. All of them see earnings growth in terms of lay-offs. That's what the proposed SBC-AT&T deal is about -- lay-offs.
They have lots of excuses. Wireless competition is one. Cable is one.
Yet they refuse to try something that Sprint has proved works -- wholesaling capacity to other companies.
When companies refuse to do things that can lead to profit -- when they go to government and make it their ally in this refusal -- what are customers (or voters) to say?
You know what I say, and I'll say it again.
The Bells must die.
Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. Jesse Kopelman on February 8, 2005 07:32 PM writes...
I wish this problem were confined to the Bells. For some reason, the idea of not growing into a monopoly has somehow become unAmerican. To admit that your company cannot master all potential markets is anathama. To actually cooperate with another company instead of freezing or buying them out is a sign of weakness.
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