Hi Jeff, I need to make a correction in your statement: "there is a reported glut in bandwidth". That is a false statement. Many lay people get bandwidth confused with miles of fiber. Sure there is a glut of fiber in the ground, but most of it is not lit. That means that there is not a glut of bandwidth. In fact, supply of bandwidth and demand are now in equilibrium, which means prices are stable and actually rising in some cases (like supplying broadband to the home).
To light fiber, companies need to buy equipment from Lucent, Nortel, Cisco, and their competitors. So as demand starts to outstrip supply of bandwidth (sometime this year), service providers will have two choices: forgo the new customer business or provide the business and profit. When they are faced with this decision, they won't turn customers away, I assure you. Instead, they'll up their budgets for equipment, light the fiber, and all those new capex on networking equipment will pay off for Cisco, which is the clear market leader in the industry. |
