CIEN CEO: Telecoms racing to cut Capex spending
By Anne Brady Of DOW JONES NEWSWIRES
SCOTTSDALE, Ariz. (Dow Jones)Telecommunications companies appear ready to further slash capital expenditures in the first quarter of 2002, Ciena Corp. (CIEN) Chief Executive Gary Smith said Wednesday.
"There is this race on Wall Street among the CFOs to see who can reduce capex the fastest," said Bloom, speaking at the Credit Suisse First Boston Technology Conference at the Phoenician resort here. "Capital spending in the first half of 2002 is looking to be flat to down."
However, the important question for optical networking companies such as Ciena is what the carriers chose to spend their more limited budgets on, Bloom told Dow Jones Newswires after his formal presentation.
"It's not what they spend; it's what they spend it on more legacy systems or nextgeneration," said Bloom. "They are deep in the budgeting process right now, and they're playing it very close to the chest."
Ciena is "entirely focused on the nextgeneration space," he said.
The capital spending cuts are motivated, he said, by the companies' need to return to positive cash flow and optimize capacity. He further clarified that he expects firstquarter capital expenditures to be down yearoveryear.
Bloom said he expects competition among telecommunications carriers to increase in 2002, as regulators become more open to allowing local incumbent carriers to sell longdistance service. Also in 2002, he expects to see "maturity" of the market for alloptical switches.
By Anne Brady, Dow Jones Newswires; 6022582003; |
