A stat on billing costs for LD...

Wed Nov 27 15:58:38 UTC 1996

At 11:59 AM 11/26/96 -0800, Vadim Antonov wrote:
>Scott Huddle <huddle at mci.net> wrote:
>> Bell Atlantic...
>
>>      In model, Binford said that against long distance revenue it
>> estimated charges of 28% for access, 20% marketing and sales, 19%
>> transport, 6% billing services, 8% administration, customer care
>> and fund for uncollectables.  He said that left 19% in pretax
>> margins.  
>
>>Anyone thinking that billing costs are 50%+ of charges are
>>encouraged to short BA, as they are about to lose a bundle.
>
>It's an RBOC model.  The 50% figure was floated in relation
>to LDCs which have entirely different econmical model.

Not only that, part of the cost of the LDC model is to have the RBOCs bill 
most of their consumer long distance. BA probably sees billing as an 
incremental add on to their domestic billing structure as it stands today.   
I would bet that we will see a greater difference when the RBOCs try to go 
national.

jd

>
>BTW, the usage accounting costs are also hidden in "transport" and
>"administration".  And don't forget capital sunk into the machinery
>required to support that.
>
>Meaningless figures again...  I'd love to see some real statistics.

>
>--vadim
>

Jeff Studds                               Internet Stuff
scope at cais.com                     phone +1 301 699 1840  
The internet: It's not just an adventure... it's a job:-)