Sanford C. Bernstein & Co is the preeminent research firm on Wall Street. When analyst Craig Moffett says that poverty threatens phone and cable TV spending, people should listen.
"The bull case for the telecom sector rests on the notion of a rising tide of smartphone adoption that will lift all boats. For this thesis to work, operators will need to extract additional revenue from lower-income Americans. And yet it isn’t clear that there’s any revenue left to extract."
People seem to be overly optimistic on how many people can really afford the latest shiny gadget or giant McMansion. Eventually, your market can get saturated.
It also raises questions about the future of consumption in the US, which is 70% of GDP. If wages and retirement savings shrink, who's left to drive spending? What would Henry Ford think?
Poverty could derail telecom, cable gravy train
http://www.zdnet.com/blog/btl/poverty-could-derail-telecom-cable-gravy-train/49560?tag=content;feature-roto
