Colin Berkshire just published an excellent article about the fat profits that are enjoyed by U.S. cellular phone service providers. His cost estimates seem reasonable, yet they amount to only two percent of revenue. He asks,
So where does all of the money go?
The only answer I can come up with as I pour through their financials is that the cell phone business is so poorly managed that there may as well not be any management. Large bureaucracy, corporate palace headquarters buildings, lots and lots and lots of executives, and a broken business model are what you are really paying for.
Because Verizon and AT&T are essentially an oligopoly (often matching each others’ prices and structures nearly perfectly) there is little competition, no need for efficiency, and no need to build lots of pesky towers.
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© Russ Bellew · Fort Lauderdale, Florida, USA · phone 954 873-4695