Cutting capex and buying CLECs by Big ILECs will not create new network. ICECs or ROBC will have to build this network anyway. However by taking away competitor for low price will increase return on investment going forward. They can charge customers more.
BTW big publicly ILECs will never buy CLECS using cpaex $.
They will buy it using its own shares. Where did you got this idea of buying using capex $, form S.Moritz of Street.com........? Since only half of CLECs is in trouble, they represent only 5% of total US capex.
zbys, I respectfully disagree. I'm simply voicing my opinion here and I'm not long or short JDSU. I sold most of my JDSU and NT this summer and I'm actually looking for a re-entry point because eventually the smoke will clear.
It's still cheaper and faster to buy half completed networks from troubled CLEC's if you want to get a jump on the competition. There will be a few come up for sale.
As for buying using capex....I suggested stronger co's may cut capex in favor of buying fiber already in place. And even of the potential buyers like T, what do they have for currency? Their stocks are wrecked. They're leveraged to the max in the debt markets. The temptation to at least scale back upgrade spending in favor of buying already upgraded networks from the competition will be large.
I'm not suggesting a large scale cutback or drop here, but, it's a big issue to watch. Whether it will turn out to be a problem will only be known after the fact but just wait, an announcement or two of a few big acquisitions and talk of "synergies" and the like and people will sell equipment providers just in case. The scale of the problem (5% etc.) won't matter as much as perception. That's been the case all along during this drop for JDSU, NT, etc.
What I find so perplexing here is that bulls and hangers on have jumped up and down for two months now claiming that the market is wrong, that business isn't slowing, that such and such an ANALyst blah blah blah......meanwhile your shares have been cut in half because you have blinders on. You see, in the short-term it doesn't matter whether you're right or wrong about troubling issues that can only be resolved in the longer-term. What matters is recognizing when the herd has turned against you. It doesn't matter whether they shouldn't have or not.
BTW, you've sure got a chip on your shoulder re thestreet.com. If you'd paid attention to what several of their writers have been saying for a while now, you'd be in great shape to buy these tech stocks when the smoke clears.
Good luck with your JDSU. I'm waiting a while yet. |
