Originally Posted by samab
It means that Verizon has more financial muscle to spend on their network build-outs.
OK, since I need to call it a day, it's time to call you on your FUD-based claims.First
, between Jan 2007 (when iPhone was announced) and now, ATTs share price has fallen 24%. Verizon, during the same time, has fallen 20%. Hardly a statistically meaningful difference.Second
, ATTs debt capacity is much higher than that of Verizon i.e., they can access the debt markets more easily and cheaply than Verizon: Debt-to-Mkt Cap is 47% for ATT compared to 73% for Verizon.Three
, when it comes to size of equity base, ATTs market cap ($155B) is much higher than that of Verizon ($86B). In other words, for equivalent dollar amounts of equity raised (not that I would recommend that), ATTs shareholders will suffer smaller dilution than Verizons.Four
, Verizons capex spending needs are likely to be far greater than that of ATT. Why? Verizon has an obsolete, largely lonely, technology (CDMA). ATT, being GSM, is far more pervasive around the world. In other words, Verizons growth can only come from newer technological investments and junking what it currently has. ATTs can not only come from its newer investments, but it can also ride the existing infrastructure for much longer than ATT.Bottom line
: From an investment spending (and financing) standpoint, ATT is better positioned than Verizon.