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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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  • Steve P.: How many people have any real competition for Internet? I know I don't. Certainly not DSL at a fourth the speed....
  • David: I mostly read your blog to hear about item #4. I'm a Frontier customer and their service speed is really poor. I hope that they someday get around to ...
  • Christopher G.: I used to work in the industry for multiple companies. We are the richest country yet one of the lower tiers of speed for internet. Why? Internet c...
  • Joe V: Keep it up Phil. I just wrote a piece to Frontline PBS about the state of broadband duopolies in this country. I hope they read and respond....
  • Dawsonfiberhood: Thanks for the hard work, Phillip. I look forward to each new article you write!...
  • Duncan: Cut the cord today, and used this blog post as inspiration. TWC jacked my bill from $140 to $180, and that was the final straw. Goodbye, TWC, but ...
  • Jimmy Bae: That really isn't the proper use of the term ennui. You can't sooth someone's extreme boredom and disinterest....
  • Martha: What if you say you are going to cancel your cable service for a streaming service, such as Roku or SlingTV? Will they likely to come back with an off...
  • Paul Houle: @Lee, it is worse than that. It is not that they cannot afford to give you fiber, it is that they can already make so much money selling you infe...
  • Lee: Frontier will not deliver that 5 Mbps to me. It will not matter what modem I have or what they have in the dslam located at the school. The copper lin...
  • Paul Houle: @Joe, don't buy the hype over G.Fast. Instead of "Fiber to the Press Release" it is just "Copper to the Press Release" G. Fast is a great techn...
  • Joe V: Here's the irony : I watched the Frontier go in front of California politicians broadcast play out and two things that got underneath my skin : I...

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