Allow me a few points:
There just won't be any rush to add capacity the way we saw the mad rush in '98 thru early '00.
The capacity that needs to be added is metro broadband access and last mile solutions. That's where the money is, so the technology will follow. Hence strength in a player like OCPI and weakness in CORV (long-haul). Unfortunately it is harder to add metro capacity than laying long-haul fiber along railways and parking an amplifier every few hundred miles.
Those days are over for good, I think.
The opposite refrain from what we hear at market tops ("This growth will last forever"). Telcoms is in a cycle that will revert to growth, driven by commercial and home demand for broadband. Ask anyone who has DSL if they would give it up. Ask them if they would turn down affordable access at 10x their DSL speed. Demand will drive growth once the product is affordable and accessible and the overall economy turns up again (another regular cycle).
With only the traditional carriers left, with rational business plans, that actually focus on making money, why do you think the telecom sector just won't revert to its more normal growth rates of the early to mid 90's?
By traditional carriers do you mean the baby Bells, T and WCOM or someone else? It doesn't matter so much who finally builds out the last mile, just that it will happen. It's not an insurmountable obstacle (just a real cluster &%$* the past few years). Don't confuse one half-assed effort with a long-term brick wall.
Growth won't revert to pre-Internet rates because data demand will continue to grow. You can't compare voice only growth with voice and data growth, especially as voice migrates to VOIP, requiring upgrades to IP systems from traditional voice switches. Switched circuit voice is the species risking extinction in the next decade or two, not data.
Of course, this won't really occur until after the sector really bottoms, which is still quite far off, imo.
I have to agree that no clear bottom is in sight - sorting out the cluster *&%* could take months or even a few years if the politicians keep screwing it up.
All of the above JMHO. |
