Cloudy Thinking

If you are interested in communication stocks, read the interview with Ari Bensinger of Standard & Poor’s Equity Research in Business Week Online.

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Q: Where do the cable operators stand in offering voice services and VoIP?

A: To compete effectively, service operators have to offer a complete array of voice, data, and video (See BW Online, 11/4/05, “The “Triple Play” in Communications Gear”). Accordingly, cable operators have begun to offer phone service through VoIP to bundle with their television video and high speed Internet access, potentially reducing churn and increasing revenue per subscriber. We estimate that cable VoIP surpassed 2.5 million customers at the end of 2005.

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Q: Besides voice and VoIP, are there other areas or trends that could give equipment stocks a lift?

A: There are potential new disruptive technologies like IP television (See BW Online, 10/4/05, “IPTV: Big Potential — but When?”), fiber to the premise, and WiMAX (worldwide interoperability for microwave access). These technologies are beginning to gain widespread acceptance and the equipment providers that are able to adapt to the changing traffic will be presented with significant growth opportunities.

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