Today’s New York Times had an article on the progress that Verizon is making in its endeavor to use fiber optics to deploy internet, video, and landline voice services to major markets around the country. The article interviewed various analysts and industry experts on whether Verizon will ever be able to recoup the $23 billion invested into the FiOS product.
The paper’s web site features a very detailed walkthrough of the analysis by Craig Moffett, Harvard Business School alum and analyst at Sanford C. Bernstein, who has been extremely bearish on Verizon’s latest investment. Moffett carefully weights the amount invested into FiOS versus its benefits. His analysis touched on many of the major topics I learned during my first semester in business school. It talked about strategy (a disruptive innovation created a need for traditional telecom companies to respond), finance (tax shield, discounted cash flow), financial accounting (how FiOS allows Verizon to make its balance sheets look better), cost accounting (how to allocate costs to calculate a cost per customer), marketing (lifetime value per customer ), some of the major topics anyone with an MBA is expected to understand.
I hope the folks at the Harvard Business School Press decide to write a case on this sometime in the future.
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