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Moffett
Craig Moffett, who regularly questions telecom executives about why they have not implemented consumption billing or usage caps as a broadband revenue enhancer, has exited Wall Street’s Sanford Bernstein after a decade.
Moffett is one of the most quoted Wall Street telecommunications analysts in the business and financial press, and his regular browbeating of executives for higher prices on broadband service have earned him a reputation of being pro-cap and anti-consumer.
Moffett is also one of Wall Street’s biggest critics of infrastructure upgrades, particularly Verizon’s fiber to the home network FiOS, which he called too expensive and not worth the investment. In a battle between cable operators and phone companies, Moffett regularly takes the side of the cable industry. Cable operators have enjoyed lower capital costs and have successfully raised prices on profitable broadband service, even as providers move to limit customers’ monthly usage.
The Wall Street analyst is reportedly launching his own Wall Street research firm sometime this spring and has poached several employees of Sanford Bernstein to get started.
“Well Craig, we looked at our figures, and determined that regardless which service tier a customer was on, our cost to deliver unlimited service was about the same. Our existing mark-up is so high that we enjoy a 90-95% profit margin across all regions and products. Frankly, we respect our customers too much, and give them credit for being intelligent. Frankly, FiOS scares the crap out of us Craig! And if we push the envelope further, like you’re urging, we’re going to kill the goose that laid the golden egg.”
You wish. Moffett is so omnipresent at these industry events, and has direct access to CEOs, CFOs and CTOs, his constant drumbeat for caps does have an impact. What these top executives don’t hear are customers reminding them they loathe usage caps and consumption billing. Time Warner should be learning a lesson right now with their $5 discount Internet Essentials for customers agreeing to 5GB of usage or less. I have a source in one of TWC’s call centers that serves states like Texas where this scheme first erupted and he tells me they have almost no takers for this.… Read more »
Google isn’t listening to him.
Google occupies a niche in the Internet ecology where innovation pays.
Moffett is the adviser for those who profit from setting up barriers and charging customers to get through them.
Yeah, I keed, I keed obviously. So I see this industry keeps giving everyone “free” speed upgrades and lowering caps. Pretty soon they’ll have the “consumption” based billing model they want when all of the tiers essentially become billed by increments of GB with a “free” first 5GB. Always the toll guards, and never the innovators.