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Technology Stocks : Broadband Wireless Access [WCII, NXLK, WCOM, satellite..]
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To: Bernard Levy who wrote (1275)8/9/2000 8:30:01 PM
From: Raymond Duray  Read Replies (2) of 1860
 
Hi Bernard,

You raise a very interesting issue here with the discussion of debt levels and the uses of cash by networkers. An interesting speculation could be made, I'm guessing, as to whether the result of the current distress in the stock valuation of the carriers will lead to a decline in capital outlays, or if the carriers are willing to take a grin and bear it attitude to stockholder pain. I really haven't formed a strong opinion one way or the other. But if improving shareholder value becomes paramount in the minds of the chaps in the corner offices of the carriers and service providers, aren't we likely to see the numbers for the equipment/component players slide a bit and have those stocks join the "misery loves company" crowd? Or is there a more 'rosy scenario' where the customers who've been clamoring for gonzo bandwidth are now going to find the buildouts so capacious and appealing that they'll be able to goose the carrier/SP bottom line enough to appease the financiers?

Just tossing some possible futures around, and wonder if you or anyone cares to speculate on how all this is likely to play out. I guess that I see the tremendous dissonance in Mr. Market's mind, wherein he can punish the carrier class and absolutely swoon about the guys selling into what is viewed as a "difficult' market. Is it irony, or is it a brave new world?

Re: The cost of gear has little to do with the frequencies being not harmonized (the cost of adjustments is trivial), but everything to do with the fact that the frequencies they use are very high, so Gallium arsenide chips are needed.

Thanks for the input as to the minimal impact of "harmonization of frequency" costs. I may well have been misled by some of my prior reading on the subject. As regards, GaAs, would the use of SiGer or InPh be advantageous cost-wise or are they even practical to consider as substitutes for GaAs?

Re: To me this almost looks like the oil services sector when oil was at $10 and The Economist was predicting it was going to $5.

I'm reminded of reading in the Economist, just as the Zedillo administration was coming in, that the editors felt it was finally safe to start investing in the peso zone.

Oops.

Best, Ray
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