The spiraling economy, while it doesn't favor anyone, will do the least harm to bigger telecommunications players, according to analyst Craig Moffett at Sanford Bernstein. Companies like AT&T and Verizon, while smacked by bad times, can invest in advertising and networks to grab for more market share.
Smaller, less financially stable players are in deep doo-doo. Sprint Nextel lost nearly a third of its stock value over the last fortnight and MetroPCS and Leap Wireless followed suit by losing about 14 percent. Raising more cash to cover operations is becoming a problem for companies that depend on financing, Moffett said, suggesting that Sprint would have a hard time selling off its Nextel business if it needed to raise cash because it would be just as hard for a buyer to find the money to purchase it.
While Verizon President and COO Denny Strigl emphasized his company is "well positioned," AT&T declined to comment any further on its financial position. Hesse, as expected, conceded that Sprint has "been hit harder than some other telecom companies."
- see this article
Virgin Mobile loses 111,273 customers in Q2. article: