i have read many reports stating that expenditures on the equipemnt side will increase and not decrease
They will increase, but at a decreasing rate, which has stock price implications for those using formulae like cfoe.
There's quite a few analyses looking at carrier capex as a percent of their gross revenues historically, this year, and next year projections. Hard to parse these analyses for applicability to the newer carriers with immature revenue streams, but I think it behooves all investors in the space (personally, I'm long on NT as a core holding) to pay attention to aggregate carrier revenue growth. Certainly that's a focus of the bond rating agencies these days.
We have something like 13 fiber carriers, of various types, with permits to dig streets in downtown Austin these days. That's fiber-laying folk, not dark fiber renters. Reminds me of the turn of the previous century when there was a multiplicity of streetcar companies in urban areas all competing for the same customers. Suspect this little bit of late 19th century business history will see a reincarnation in the early 21st century.
W/r/t the coming IPO's, a bunch of these seem to be, at least at present, one-trick ponies. Probably some are hoping that a CSCO, NT, JDSU, or maybe even a CIEN, eventually comes along and swallows them up. (This probably will happen, but not at the wonderland valuations these guys may be dreaming about today.) |
