RHK suggesting that the capex slowdown is a mirage?
New information available today from RHK suggests the fastest growth in optical equipment spending will be in
the Asia/Pacific region [where CSCO has done a good job at market development], driven by accelerating bandwidth demand. RHK stated that China is adding about 1 million new Internet users each month - expected to generate $750 billion on infrastructure across the region to support projected demand.
Remember - Sprint announced their plans to increase 2001 Capex spending by about 20% to the $6.2 billion range from the $5 billion range in '00. Subtract investment spending and internal spending will go up almost 50.
Of course we now here that Salomon Smith Barney's view is that telecom Capex will generally rise not fall in '01. Add to that the fact that Sprint's new Capex guidance is well above their estimates of $3.85 billion for '00 and $3.90 billion for '01... and we start to get a new picture... from the VENDORS!!!
Recent reports from analysts such as RHK, Morgan Stanley Dean Witter, Merrill Lynch and Robertson Stephens all indicate that industry's Capex for 2001 will not decelerate. Can't wait for this news to start coming out..... Bambs, Monty, Eski and the others are going to choke on this one...
The award however goes to Robertson Stephens. These guys understand the issues in the market because while they aren't projecting the Capex growth rate they do state that due to overwhelming competition in the telecom industry the players have no choice but to invest in the networks of future which means not slowing down their Capex.
MSDW goes on to predict that the Capex will shift away from capital assets such as truck leases, buildings, laying new fiber, and voice switching and towards optical infrastructure, routers, switches, etc.. meaning that companies delivering these products may acutally see a huge uptick in business next year!!
There's much more data out there.... all one has to do is go look for it... sometimes you have to buy it... but bottom line... the analysts are speaking out of both sides of their mouths.... trying to get in cheap??? Looks that way to me.
OG |
