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Technology Stocks : Lucent Technologies (LU)
LU 2.595-0.4%1:44 PM EST
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To: telecomguy who wrote (20582)7/26/2002 11:21:43 AM
From: David Hansen  Read Replies (1) of 21876
 
TG,

I disagree with your strategy. Buying a particular carrier like C&W is putting all your eggs in one basket. By owning a vendor like LU, it's almost like owning an index fund of carriers... With C&W you are restricting yourself in WHERE the recovery may hit as well. C&W for the most part represents the UK. I did look at one of their financial presentations back in March... CW Global was about twice the revenue of CW Regional. 75% of CW Global is the UK. So in affect you are invested in UK telecom... If a telecom recovery starts in Asia, moves to CALA and leaves the UK with only a modest bump up - you missed it... That's why global telecom vendors who survive would be the better investment unless you go to a telecom index fund.

Another assumption you are making is that the existing carrier base can turn revenues around with existing equipment. To some degree, their existing equipment is one of the reasons they are not making revenues. Many of today's networks are too expensive to run. As vendors like LU figure out real cost savings by OA&M automation (network intelligence), continued capacity increases and disruptive technologies (like 3G via CDMA2000)... new equipment sales could spur profitability... in which case your strategy is bass ackwards.
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