Hi JW,
It's nice to read such a bullish assessment of where things are headed. <g>
Re: Guess where Fiber Companies are going in the next Decade.
I'd guess a period of consolidation as the industry matures. Components will have to become planarized and their production automated. Thus, companies like NEWP will play a very important role. Many of the smaller FO shops will take technology dead-ends. Many companies will be starved for capital after the initial orgy of money that is flowing into the industry today. Valuations will normalize as Mr. Market starts to view fiber optics as just another part of a normal economy, instead of a revolutionary breakthrough with an exciting story.
Re: Bandwidth is a Commodity, and like Oil, the Optic Sheiks will not see a Ceiling on Wealth and Valuation.
The same was said about radio in 1928, about railroads in 1872, about tulips in 1634. The difference between oil and bandwidth is fundamental. Oil is a non-renewable resource that becomes ever more expensive to recover. Bandwidth is completely renewable (so much so the concept hardly applies)
and expandable as we see it today, and will be available at a declining price point for the foreseeable future. While the oil companies have a strict discipline about profitability, this is not the case in the telecommunications industry, which seems caught up in a competitive frenzy for market share that is, frankly, starting to frighten the bondsmen who are financing this industry.
As I see it, the only companies that I need to pay attention to as possible investments are those with unassailable intellectual property rights, legions of advanced researchers and a lock on future developments. I see none today, as the tendency in the industry is for one technology to leapfrog another, and thus obsolete the fleeting advantage of the prior leaders.
YMMV, Ray |
