I’m in Hollywood Chapter 688: They are here

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Eric opened the Chris and read the information.

Compared with the AT-T, a telecommunications industry giant with a market value of more than 80 billion and an annual profit exceeding 4billion, the other two large telecommunications companies trying to enter the mobile communications market, Verizon and Sprint, are far worse.

Verizon ’s predecessor was Bell Atlantic Corporation which was dismembered from the original AT-T in the 1984 telecommunication monopoly case. After ten years of development and integration, Verizon ’s current market value is 23 billion, but Verizon has been in performance in recent years In a downturn, last year it lost 700 million 54 million USD.

Compared to that, the market value of non-Bell Sprint is only 10.5 billion USD. However, Sprint ’s operating conditions are far better than Verizon. The annual profit in 1994 reached 800 million 80 million. Perhaps it is also because of this good performance. Sprint Ambitiously wanting to deploy a wireless communication network across the country, so in the auction process of the A and B segment licenses, the wireless spectrum licenses finally obtained even exceeded the sum of the two major telecommunications giants AT-T and Verizon, Sprint As a result, it will bear up to 1.5 billion USD spectrum licensing fees, just this expenditure is equivalent to Sprint has maintained the current good operating conditions of the company's net profit for two years.

After reading the information, Eric almost understand why Chris just said that it is not impossible to pull Verizon and Sprint into the CDMA camp.

Although these two companies are considered giants in the United States telecommunications industry, they are far from being comparable to the older brother AT-T.

Verizon has accumulated huge debt of 8.9 billion USD due to several mergers and acquisitions in recent years, which is equivalent to 38% of the company ’s market value. This is also the main reason for Verizon ’s consecutive losses in recent years. It increased the debt expenditure of 600 million USD for it, and it wants to complete the establishment and successful operation of the mobile communication network, and the debt ratio in the next few years is likely to exceed 50%.

And Sprint's situation is not necessarily so good. Although its original operating condition is very good, this company's expansion in the mobile communications field is too large this time. 1.5 billion USD's spectrum license expenditures and the huge amount of funds needed for the construction of a nationwide mobile communication network in the next few years may even allow it to embark on Verizon's continuous loss for a long time in the future.

The wealthy AT-T can make the decision to choose GSM technology as its mobile communication network standard without hesitation, without having to consider GSM may be eliminated by more advanced third-generation communication technologies in the future. But Verizon and Sprint, whose financial situation is very tight, need to carefully consider the cost factors of the technical standards they choose in the construction of the communication network. Although CDMA technology is temporarily unable to achieve commercial use. However, many experimental evidences prove that CDMA has a huge advantage over GSM and other second-generation digital communication technologies in terms of spectrum capacity and network construction cost.

Chris patiently waited for Eric to finish reading the material and said: "In addition to the factors of CDMA itself, if Firefly expresses its interest in the telecommunications industry and publicly spends Qualcomm, Verizon and Sprint are very likely to lean towards CDMA. Because with the further expansion of the debt burden of the two companies, whether it is debt financing or equity financing, the difficulty of obtaining funds will be greatly increased, and Firefly has the huge funds they desperately desire, even if we Without providing direct financial support to these two companies, they will also tend to carry out technical cooperation with Qualcomm, which is backed by the strong strength of Firefly. "

Eric nodded, leaned his body on the sofa, rubbed his fingers gently on the material in his hand, but had some other thoughts in his heart.

In any country, the telecommunications industry is under the monopoly of certain giants, if not the famous telecommunications antitrust case of 1984. AT-T has developed to the present, and it will definitely be the company with the highest market value of United States. Even if seven subsidiaries were spun off at this time, AT-T with a market value of more than 80 billion USD is still the top five corporate giant in United States. One General Electric market value is only more than 90 billion USD.

Although in United States, this monopoly of AT-T did not happen with administrative support, and even AT-T wanted to expand further, it would be restricted by the anti-monopoly department of Federal Government, but even after experiencing a large-scale Splitting, AT-T's actual monopoly state is also difficult to be broken. Because after more than 100 years of development, AT-T has a perfect national fixed-line telephone communication network. This network is not only expensive, but also not easily built in three years and five years. Many emerging companies want to develop their own telecommunications business, and most of the time they even need to lease communication lines from AT-T. In this case, it is basically impossible for the latecomers to catch up or even surpass AT-T.

However, in the past few decades, things have seemed to be a rare opportunity. With the arrival of the wave of new technology, two important opportunities have emerged that have broken the industry pattern, the rise of the mobile communications industry and the network broadband industry. At present, these two industries are just in their infancy. No one knows what scale these two industries will develop in the future except Eric, but Eric is very clear. Twenty years later, mobile communications and Either of the two major industries of network broadband will far surpass the fixed-line business that AT-T relies on to maintain its monopoly at this time. Even before the rebirth of Eric, many families have no longer installed fixed-line phones, but mobile phones And broadband has gradually become a necessity in people's lives.

Although the recent section C license auction was delayed due to that reason, some absurd litigation was delayed, indicating that the latecomers want to enter the telecommunications industry, and there are still heavy or light industry barriers. But these barriers are nothing to Eric, who already has huge capital in his hands. In some online game terminology of later generations, he does n’t need to play from scratch like those novice village trumpets, but can spend money to buy a good one. 'S high-level account directly enjoys the fun of the game, and at this time, he has two good' game accounts' in his hands.

Eric still knows some of the future development prospects of these two companies. Verizon and Sprint and AT-T will be the three giants of the United States telecommunications industry in the future. He guessed that this situation in the future should be three companies, especially Verizon And Sprint is now sparing no effort in the layout of mobile communications, and at this time United States other telecom companies with the strength of Verizon and Sprint, such as Southern Bell, Northern Telecom and other companies, should also have missed this important industrial change, gradually Was eliminated by the market or annexed by other enterprises.

Moreover, because of the huge amount of funds required to pay for the licensing fees of spectrum licenses and the construction of nationwide mobile communication networks, it is now the best time to acquire shares in these two companies. Eric knows that this should be the last moment and missed It may be difficult to have another chance because of the arrival of the new technology wave. When the Nasdaq index starts to soar in the next few years, whether it is Verizon or Sprint, only a small number of stocks need to be issued to the circulation market to raise enough Development funds, so it is impossible to introduce large shareholders such as Firefly to change the company's equity structure. Even if they are willing, Firefly will not be able to provide enough funds when the market value of the two companies skyrockets.

When Chris saw Eric suddenly thinking, he waited patiently for a while before asking: "Eric, what are you thinking?"

Eric recovered, raised the information in Yang ’s hands, and asked directly: “Chris, which one of Verizon and Sprint do you think is easier for us to accept our investment?”

Chris raised the eyebrow, just about to speak, the talker near the two rang a few times, Eric got up and pressed the call button, and there was a voice from the manor guard: "Mr. Williams, Mr. Jacob and Salmasi Mr. is here. "(To be continued.)