Why is Verizon's profit margin so low? (read details?

Question

What's the big expense with these cell companies I don't get it? Also Do you think that since these cell companies have gotten expensive like 20 dollar unlimited texting since they basically have a monopoly on the market with buying each other out? If you said yes to the last question do you think that an entrepreneur could possibly start a cell company with way cheaper prices like 5 dollar unlimited texting and make a reasonable net income? Why why not?

http://finance.yahoo.com/q/ks?s=VZ

Answer 1

I can't imagine anyone being able to raise the necessary capital even to ENTER that market, or thinking they'd get enough market share to make it profitable, and Verizon has a whopping infrastructure and other overhead costs. They have a monopoly if they act like one, but it looks like they're still competing on price. They have MASSIVE marketing expense and a whole lot of people to pay.

But I haven't looked at the numbers to see whether it's on the revenues side or the expense side of the P&L.

Answer 2

Could you start a new cell phone company?  Of course.  Would you be able to beat Verizon's, or anyone else's price?  Doubtful.  The technological overhead is tremendous.  In order to put calls out, you need a nationwide series of cell repeaters (the dishes on the towers).  In order to put up the repeaters, you need to either build a tower or rent space on an existing tower.  Then you need the computer/transmission equipment to run the system.  Then you need to hire a staff to run the network, perform upkeep, continually upgrade the hardware and software.

There is a reason why Verizon's prices are where they are.