​Jeff Kagan: Lesson Learned Working with Wireless, Telecom Competitors

Jeff Kagan  |


As a telecom and wireless analyst over the last 30 years, I have worked with almost all of the competitors in the space. I have learned so many important lessons from interaction with CEO’s, executives and their companies. Lessons that give me the ability to have a pretty good idea which companies are best positioned to win going forward. Let me share one very interesting idea on this topic for the investor, the worker and the customer.

The key lesson has to do with what I call the growth curve or growth wave. Every company is on the growth curve. Some are on the growing side, some have crested, and some are falling. Only those companies on the growth side of the growth curve are positioned to grow.

Winning Companies Are on Rising Side of Growth Wave

Let me give you some real-life examples of what I am talking about. Consider wireless handset or smartphone leadership over the last few decades. There are plenty of examples we can learn important lessons from.

Blackberry is a great place to start. They were a growth company in the smartphone space. That is until the iPhone and Android hit the marketplace. Since, Blackberry was more of a business device with a few hundred apps, they quickly crested and fell against iPhone and Android which today have more than two million apps and the vast majority of market share.

Blackberry, Nokia, Motorola Have Crested and No Longer on Growth Curve

Nokia  (NOK) is another example of another handset company which was growing, then crested then fell on their growth wave. The same thing with Motorola which started out as the leader in wireless, but when the networks switched from analog to digital in the 1990’s, lost their way and have not recovered.

Motorola fell off their growth wave and was replaced by Nokia and Blackberry who were then replaced by Apple  (AAPL) iPhone and Google  (GOOGL) Android. This is the way things can quickly change.

Consider wireless carriers. A decade ago there were many, smaller wireless carriers. Then the wave of mergers and acquisitions transformed the industry. It changed from lots of smaller players, to a few larger players with national footprints.

Verizon Wireless, AT&T Mobility, DirecTV Now on Growth Wave

Today, even newer competitors are moving in like the cable television companies, Comcast  (CMCSA)Xfinity Mobile, Charter  (CHTR) Spectrum Mobile, Altice  (ATUS) and others.

Today, the wireless industry looks very different from a decade ago. Today, there are fewer, but larger competitors Verizon  (VZ) Wireless, AT&T  (T) Mobility, T-Mobile  (TMUS) and Sprint  (S).

Today, we see wireless changing once again. We see new MVNO competitors like the cable television companies entering the picture. We see companies like AT&T Mobility moving into and transforming the pay TV space with DirecTV NOW, wireless TV or mobile TV. We see Verizon Wireless using their acquisitions like AOL and Yahoo to transform the way they do business.

T-Mobile, Sprint, C-Spire Wireless on Different Growth Wave

Today, we also see both T-Mobile and Sprint growing once again. They want to merge which will give them size and scope to be an even stronger third place competitor. C-Spire Wireless has a limited market area, so they too are on a different growth wave. So far, these companies are all still wireless-only plays.

So, you see, wireless and telecom are transforming themselves. They have been doing so for the last few decades and that transformation continues today. In fact, it will most likely continue going forward as well.

If that’s the case, what will the wireless industry look like a decade from today? Two decades from today? An exciting, but unanswerable question today. That’s the challenge we all have.

The challenge is to look at all the wireless, telecom and tech players, networks, smartphones, computers and all sorts of gear, and determine which are on the growing side of the growth curve.

Comcast Xfinity Mobile, Charter Spectrum Mobile, Altice Another Growth Wave

Only the companies on the growth side of the growth curve will likely continue to show growth. And as an investor, worker and customer that’s what you are looking for.

Remember, yesterday all wireless and telecom competitors, either on the network side or the equipment or handset side, rode the same growth wave. They all looked similar and it was easier to compare them and decide which you wanted to invest, or work for or be a customer of.

Today, things are different. Today, there are many different slices to this pie. Today, different companies are heading in different directions. This makes it more difficult and complicated to compare.

Yesterday, all competitors in one slice of the pie seemed to head in the same direction, either growing or cresting or falling. However, today one competitor can be on the growth side and another one can be on the falling side of the same growth wave.

That’s why it’s important not only to understand the development of the industry, but where each competitor is on the growth wave. Which are growing, which are cresting, and which are falling.

The wireless, telecom and tech industry, is fast moving and fast changing. It has always been that way and it will always be that way going forward.

I have worked with most of the competitors over the last several decades and will continue to do so. I talk about my vision of where we are heading. This opinion has changed several times over the last several decades.

Today, we are beginning the next big transformation wave. Some companies will remain on the growth curve and do well like Apple, Google, Samsung, AT&T Mobility and Verizon Wireless. Others will crest and start to fall. Understanding where each company is in this process is key to your continued investing and employment success.

Jeff Kagan is an Equities.com columnist. Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst, speaker and consultant. He follows wireless, wire line, telecom, Internet, cable TV, IPTV, Cloud, Mobile Pay, FinTech and communications technology. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
S Sprint Corporation 6.12 -0.03 -0.49 8,321,321 Trade
TMUS T-Mobile US Inc. 68.00 -0.12 -0.18 1,371,567 Trade
CHTR Charter Communications Inc. 316.93 -3.87 -1.21 635,214 Trade
VZ Verizon Communications Inc. 58.78 -0.17 -0.28 8,951,985 Trade
T AT&T Inc. 30.06 -0.45 -1.47 18,065,478 Trade
CMCSA Comcast Corporation Class A Common Stock 38.25 -0.04 -0.10 9,747,733 Trade
ATUS Altice USA Inc. Class A 17.52 -0.20 -1.10 2,923,160 Trade

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