Stephen P. Young, a former senior vice president at Verizon and visiting instructor at Georgia State University's J. Mack Robinson College of Business, is available to discuss the telecommunications industry in the wake of increasing consolidation, and the bigger picture surrounding the proposed AT&T acquisition of Direct TV.
Young served as senior VP for Corporate and Government Markets for Verizon Business, responsible for $10 billion in revenue supported by more than 3,500 employees across the country. The division's focus is to grow and maintain its existing revenue base through the acquisition of new customers and strategic product sales in the Enterprise, Education and Government markets.
"As a new round of proposed mergers hits the news the game is on and the game, as always, is about growth. Telecoms and cable are now heading toward a mammoth showdown and their strategies are enlightening.
It's a well known adage in marketing circles that its far easier, (and cheaper) to keep and grow existing customers than it is to acquire new ones. The field of battle in the short run in the telecommunications war revolves around adding subscribers, and an arcane term in the business -- Average Revenue Per User, or ARPU.
In the long run it's all about another telecom buzz word, the last mile.
This strategy has informed the latest proposed and rumored acquisitions in the telecoms; the Comcast proposal to acquire Time Warner cable and the interest of AT&T in Direct TV. Why? New customers -- and lots of them. And here is where ARPU comes into play.
ARPU is the holy grail for the telecoms and cable companies. Cell phone and cable TV adoption are near their peak in the U.S., so growth must come from adding services and usage to existing accounts. AT&T doesn’t think that it can sell a significant number of new Direct TV subscribers nor does Comcast think it can greatly improve sales in Time Warner cable markets.
But both believe that they can grow the Average Revenue Per User for these new customers by selling them add on services through bundles."
More about Young is available at http://robinson.gsu.edu/profile/stephen-p-young/.
Stephen P. Young
Visiting Instructor, Georgia State University