Who’s Scared of Naked Broadband

Naked Broadband, lurid imagery notwithstanding, is a clear-and-present danger to incumbent telephone companies, according to S&P. It is more troubling that consumer preference for wireless over fixed voice. And even more troubling than the growing popularity of VoIP services like Skype. The article says that the loss in wireline voice revenues has been made-up with wireline broadband revenues. As naked broadband, (that is just broadband, and not rest of the crud) becomes more popular, the incumbent’s monthly revenue stream will decline by about 40 percent. Here is how the math works out – In UK, for example, consumers pay sixteen euros a month to get a 23-euro-a-month DSL connection. Take away the sixteen euros, British Telecom is left with about 59% of possible total monthly revenues. This explains why all the Bells (with the exception of Qwest) are dragging their feet on the issue of “naked broadband.” SBC promised to start “naked DSL” trials this summer, but no update since then. And the way things are going, Tampa Bay Devil Rays will win a world series before naked broadband is available stateside.