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Telecom Dividend Cash Bonanza – Landline Customers Drop, But Stockholder Payouts Rise

Phillip Dampier February 10, 2011 AT&T, Bell (Canada), Frontier, Qwest, Rural Broadband No Comments

The telephone landline business is hardly a growth industry, as an average of 5-7 percent of customers disconnect their home phone service every quarter, but you wouldn’t know that from the dividends being paid to stockholders.

From AT&T, Bell Canada, Frontier to Qwest — the companies that speak in terms of keeping their customer defection rates down are paying dividends that often exceed earnings.

Among the worst of all — Frontier Communications, whose outsized dividend is expected to reach 75 cents a share.  That, despite the fact analysts predict the phone company will earn only 40 cents a share or so this year.

Where do these phone companies expect to make their money?  Their broadband and wireless divisions.  AT&T and Bell Canada are able to cover landline losses with enhanced profits from their IPTV services like U-verse and Fibe.  Frontier and Qwest expect to survive on providing cheap-to-deploy DSL service in rural areas avoided by cable operators.

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  • rebargain ee broadband review: Great looking website. Presume you did a whole lot of your own html coding....
  • Fred Pilot: Re profitability, they have a duty to their shareholders to maximize profits. Wasting money on poorly targeted marketing reduces profits....
  • Dancer: I agree with you 100%, Verizon should be in trouble by federal government as they decided to give up on FiOS and wireline business for no apparent rea...
  • Dave Hancock: And folks are also turning to commercial-free streaming (Netflix, Amazon, etc) to avoid the hassle of commercials....
  • Jim Livermore: "Frontier reps I’ve dealt with in the past are not familiar with their products. I’ve had Wi-Fi referred to as “wee fee” and megabits called megabytes...
  • lllllll: The reason why the share holders aren't revolting is due to the large ever increasing profits of these ISPs due to anti Consumer methods such as Bandw...
  • Adam: We are located in the Raleigh-Durham area in NC. Frontier is the only competitor for TWC for bundled services around here, but their internet speeds a...
  • Michael: Thanks for the info, Phillip. I'll be sure to update if any new events unfold. As it stands now, I'll be going from TWC Standard internet (15 mpbs...
  • Phillip Dampier: Broadband customers can bounce back and forth easily between Earthlink and TWC on new customer promo deals. Since TWC provides service for both and en...
  • Michael: Well... that didn't work as planned. I used the Twitter method and Time Warner responded immediately. I told them I found a better rate and wanted t...
  • Fred Pilot: One is inclined to wonder about the jarring misalignment of these marketing communications campaigns. The legacy incumbent telephone and cable compani...
  • Phillip Dampier: Where are you located? I was on a rate step-up promotion (where they send you a letter congratulating themselves for offering you a new higher promo r...

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