SECTORBASE Indices Show Broadband Becoming a Reality as Cable and Wide Area
Network Communications Equipment Subsectors Post Strong Gains
BusinessWire, Monday, February 28, 2000 at 15:42
SAN FRANCISCO--(BUSINESS WIRE)--February 28, 2000--The mainstream adoption of high
speed Internet Access is imminent.
Communications Services companies of all types continue to spend on infrastructure that will
enable the next generation of Cable and Digital Subscriber Line (DSL) technologies. Over the past
month, in the Communications Equipment subsector, the underlying Wide Area Network subsector
index rose 19.42% as the Cable Equipment subsector added 25.25%. Even the DSL Specialized
Semiconductor group roared higher by 31.91% over the same span amid a wave of recent
announcements.
The Federal Communications Commission voted unanimously last week against forcing Cable
Television Operators such as Adelphia Communications (NASDAQ:ADLAC) and Cablevision
(NYSE:CVC) to immediately open their lines to competitive Internet Service Providers. AT&T
(NYSE:T) has agreed to open its lines to competition, but an exclusive agreement with At Home Corp.
(NASDAQ:ATHM) should prevent any meaningful activity until 2002. In addition, Bell Atlantic
(NYSE:BEL) lost a patent judgement against Covad Communications (NASDAQ:COVD) that was
interpreted as a retaliatory suit against Covad's plea for more access to the network's Central Offices
(COs). These decisions help clear the way for Cable companies to upgrade their Headend and
Transmission systems and for Data CLECs to fill Local Carrier CO cages with Access Routers and
Multiplexers.
Companies within these subsectors are doing their part to better position themselves for the
next wave of orders. Demand for Terayon's (NASDAQ:TERN) Edge Concentrators and Multiplexers,
devices that aggregate and amplify signals along a Cable network, helped those overall groups climb
38.65% and 80.99% in the past month. Investors also pushed the Cable Router group up by 37.99%,
mostly on the back of Com21 (NASDAQ:CMTO), whose Headend Electronics are setting the pace in
two-way Cable Voice, Video and Data services.
On the DSL side, Orckit Communications' (NASDAQ:ORCT) announcement of interoperability
with four new Customer Premise Equipment Access Routers from Efficient Networks
(NASDAQ:EFNT) coupled with Teltrend's (NASDAQ:TLTN) optimism regarding its merger with Modem
group standout Westell (NASDAQ:WSTL) helped the Carrier Edge xDSL group increase by 38.94%.
These companies' Central Office repeaters amplify signals in a High-bit-Rate (HDSL) circuit to extend
the distance of transmission. The Semiconductor makers whose chips go into this Equipment also
made significant announcements. With the pending acquisition of PairGain (NASDAQ:PAIR) by ADC
Telecommunications (NASDAQ:ADCT), Globespan (NASDAQ:GSPN) has acquired PairGain's
microelectronics unit while Virata (NASDAQ:VRTA) said that Ericsson (NASDAQ:ERICY) will use its
chips for a new line of Customer Premise Modems.
Despite the substantial run up in prices, SECTORBASE analysts see significant growth
opportunities in the Communications Equipment makers and their suppliers. With rapid progress in
infrastructure to support home access to high bandwidth service providers, costs are coming down
and the improved responsiveness and reliability of broadband Internet Access should prove enticing to
the huge market for individual and home use.
For additional market analysis and index performance data, please register for SectorTrends at
www.sectorbase.com.
Note: SECTORBASE provides research for use in investment decision-making.
SECTORBASE.com, Inc. does not offer any investment advice, or endorse, recommend, directly or
indirectly, the purchase of individual securities. The information and pricing data available is thought to
be reliable and accurate, but cannot be guaranteed.
About SECTORBASE.com
SECTORBASE.com, Inc. designs, develops and markets a powerful Investment Research
Platform to investment professionals and individual subscribers through its web site
www.sectorbase.com. The platform possesses key product-by-product categorizations, essential to
performing accurate comparative valuation and peer group analysis. The Company utilizes a
patent-pending Internet-based technology platform to provide original content and services that include
proprietary sector-specific and non-financial statement, qualitative information, over 15,000 product
and service indices, and sector-specific original news and alerts.
CONTACT: SECTORBASE.com, Inc.
Scott Slatin, 415/365-8161
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: INTERNET NETWORKING TELECOMMUNICATIONS HARDWARE
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