One might argue that recent developments in the global telecom business suggest growing strains at the very least, non-viability of some business models, in some markets, and serious strain in others. One might infer from the “wholesale only” broadband access models used in Singapore, Australia and New Zealand, that facilities-based “very hgih speed access” is not a business most providers can afford to be in.

Instead, networks providing that access, are a functional monopoly, too expensive for more than one provide to attempt.

In Europe, the European Commission seems seriously concerned that European facilities-based broadband providers might not be able to afford the next round of upgrades, and seem to be considering policies that would boost the financial return from new and massive investments.

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So what of the U.S. business? Craig Moffett, Bernstein Research analyst, has been a notable “bear” on business prospects for the large mobile service providers. He now calculates that AT&T and Verizon Wireless are not even earning a return above their cost of capital. http://www.businessweek.com/magazine/for-wireless-giants-atampt-and-verizon-reception-may-get-spotty-07142011.html

In other words, he argues that AT&T ad Verizon now are already losing money, investing in networks and services that do not earn back the cost of the borrowed money driving the investments. But most of the problem comes from the wireline businesses, he argues.

Some will dismiss such analyses. But some would argue it is a reasonable question to ask how much capital ought to be invested in today’s broadband networks, much less tomorrow’s networks. Financial analysts have cringed, for decades, whenever cable operators or telcos have prosposed major network upgrades. AT&T executives have argued that more-incremental fiber to neighborhood upgrades make more sense than fiber to home networks, for example.

But there are new considerations. It is an open question whether tormorrow’s business will be lead by mobile or fixed services. But it is no unreasonable to argue that in a capital-constrained environment, higher returns can be earned from heavier investment in mobile networks and services.

It’s a question, indeed.

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