Verizon expecting high repair cost due to Sandy to affect profit

Posted on Nov 3 2012 - 2:25am by Harvey

Last Friday saw Verizon making a statement on the progress of their efforts in bringing their services back online for its customers affected by monster storm Sandy. The company thinks maintenance and repair jobs may take a big slice of its fourth quarter earnings.

Verizon said it is now focusing its resources in resuscitating its network and cell phone towers.  The company cannot yet provide figures how much the storm impacted its business  and on its operating profit, “but we expect that it could be significant.”

Verizon previously said that 96 percent of its towers in areas affected by Sandy were operational, but later lowered the number to 94 percent. However, powering up the impacted towers will demand considerable effort.

“Unfortunately, the extent of the storm damage — including lingering power outages and inaccessible roadways — in harder-hit areas like New Jersey and the New York City metro area makes full restoration a marathon and not a sprint,” Verizon president of consumer division Bob Mudge, said.

“We ask for customers’ patience and understanding.”

Other wireless carriers were also got hit hard. The Federal Communications Commission revealed that 19 percent of cell phone towers in the impacted area are still down. FCC Chairman Julius Genachowski said that there are still “much work to be done,” in bringing the services back to their normal operations.

Sprint took the brunt of the storm especially in the core areas of New York, Connecticut, and New Jersey, where the company’s network are only operating at 80 percent capacity. Only 75 percent or its towers in New York are online.  In New Hampshire, Massachusetts, Pennsylvania, and Rhode Island, the company’s network is only working at 90 percent capacity.

AT&T declared that the vast majority” of its cell sites are working although its continuing to restore service in areas hit hard and experiencing power outages and damage.

Surprisingly, AT&T and T-Mobile display a cooperation by allowing their subscribers in affected areas to roam each others networks free of charge– a rare occurrence in the wireless industry. Both networks are compatible technically, making the move possible.

All carriers announced that they are offering free landline calls to those people without service in their retail stores.

Wireless industry analyst from Yankee Group Ken Rehbehn thinks Sandy’s impact on wireless carriers will most likely be second only to Hurricane Katrina.

” A big difference between New York City and Katrina is that the flooding is not lasting as long in as large an area,” he said. “But the failure of key power stations and power distribution in a complex, dense area such as lower Manhattan means that secondary power being brought in is essential,” he said.

Customers angered  over the lack of backup contingencies for wireless networks vented their emotions on social networks. They called for a fallback system that exists in Hurricane-frequented areas like Florida, where backup generators are readily available at almost any cell site. Rehben commented that the cost of doing that in the Northeast would not be practical though.

The new 4G networks that carriers are gradually deploying will be more energy efficient than existing 2G or 3G systems. Once fully deployed, the batteries for cell towers will last longer, giving more time for carriers to repair any damage.

source: cnn

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