The markets appear to have intimidated Verizon so much that the company recently postponed an IPO for its wireless spin-off, originally slated for later this year. Verizon has been posting solid profit numbers for several quarters, giving it some momentum over its competitors. Compare that to some of the less than stellar numbers at the end of the second quarter from the likes of Nextel, a 38 cent loss per share, and Sprint PCS, which reported a loss of 41 cents per share. Given the eagerness of foreign providers wishing to penetrate the domestic wireless market, the likelihood of a merger or acquisition during the next two years seems to have increased with the Clinton mandate. But their limitations may serve to arrest consumer demand for wireless Internet services.
Disappointment is inevitable.
Customers may be lucky to be courted by so many carriers, but paying a fee for wireless Web connections will likely leave a bad taste in the marketplace. Carriers are already engaging in aggressive sales campaigns, with companies like Verizon aiming at securing one-year contracts for WAP customers. When they grow frustrated, however, they are just as likely to dump one carrier for the dazzle of another. Voice, in fact, is not likely to lose its luster any time soon, even with the revolutionary arrival of data-capable devices. This rise is the first significant increase in spending since statistics were first collected in 1988.