In case you are wondering why commodity prices continue to rise in the face of a U.S. slowdown, please listen to what Rio Tinto CEO Tom Albanese told our David Faber a short while ago. He discussed how China was continuing to suck up a greater and greater part of the world's commodity supplies, and concluded by noting that China now consumes:
--0ne-third of the world's aluminum
--0ne-fourth of the world's copper
--50 percent of the world's steel
--50 percent of the world's iron ore
The interview is here.
Wireless price war? Yesterday's announcement of a flat wireless rate of $100 from AT&T, Verizon,T-Mobile, done in response to fears that Sprint would announce a $60 a month plan, has driven Verizonand AT&Tto new lows.
There are two problems:
--Could accelerate a decline of wireline
--Price war in wireless
But that's not all. There's other issues:
--Residential broadband growth slowing
--Less consolidation opportunities
--Less certain regulatory environment (benign recently, now uncertain with the elections)
The problem here is that there has been an assumption that there will be robust growth in wireless revenues and EBIDTA. If pricing continues to move down, that assumption may now be out the window.
What to do? Some firms--including Atlantic Equities--are recommending the tower stocks, including Crown Castle and American Tower. They say the will benefit from the volume growth driven by unlimited voice and data plans.
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