Yes, picking just C&W IS like putting all your eggs in one basket. The problem is that there is very FEW BASKET left to put my egg!
What Carriers are left that have the staying power to ride this nuclear telecom winter right now? Maybe AT&T, Sprint and possibly BT, Deutche Telecom and France Telecom if their respective gov't rides to their rescue assmuming the EC allows this to happen (highly unlikely since telecom is a global business and the US carriers will cry foul).
Now that I have put your argument to rest about picking only one Carrier, let's look at your second argument about picking the equipment vendor over their customers.
I don't know if you noticed but ALL the telecom service providers are hurting big time right now. Any equipment vendor that serves such a depressed sector is bound to be hurting. LU as a global supplier is no exception.
THERE IS NO WHERE TO TURN for vendors like LU and NT. The demand for equipment is dead all over the world.
Now, let's look at your last point about the current carriers not being able to turn their fortunes around without spending more $ on new-fangled equipment that can supposedly reduce operating expense and increase transport capacity/speed/performance.
The major problem with this argument is that there is a supply glut. No Carrier is going to invest in technology that is going to expand the supply because THAT is not the problem.
Carriers have built too many super highways but they have NOT given their customers any reason to take out their car and drive on their newly invested highway. What's more, these carriers have not figured out a way to charge the cars properly for the miles they drive on their superhighway. Right now you just pay a one-time charge each month and you can use the highway as much and as often as you want, kilometers damned.
Carriers don't necessarily need new equipment (although obviously any technology that reduces headcount is good for the bottom line). They need to bring new killer applications to draw demand and more importantly, they need to figure out how to bill by the packet/speed/reliability. And lastly they just need to weed out the weak players that are spoiling the market by pricing bandwidth BELOW operating cost.
Why do you think 3G buildout is getting delayed or being mothballed? Aside from the cost of the build-out, there is growing consensus that it may be very difficult to create demand for always-on data applications on a small cellphone/PDA device that can extract additional user fee from the end-users.
The problem right now is NOT technology. It is a business problem and as such, until the Carriers like AT&T, LVLT, CWP, SPRINT, BT, France Telecom, etc. figure out a way to morph their business into profitability, they AIN'T (repeat after me) going to spend any more money on equipment or new-fangled transport.
Besides they have NO MONEY so even if you are completely correct (which you are not!), the Carriers aren't going to try to spend their way out of this telecom recession. After all, the Carriers are no longer owned by their respective gov'ts and cannot simply tax their citizens through monopolistic long-distance price gouging.
Bottom line? Wait for the Carrier sector to recover. Until their cashflow starts turning substantially positive and their balance sheets are clean and unleveraged by billions in unserviceable debt, THEY AIN'T GOING TO SPEND ANY MORE MONEY THAT THEY DON'T HAVE IN ANY CASE.
(by the way C&W is a global player, not a UK player. In fact they have one of the most far-flung international network -- probably the most distrbuted world-wide network in the world and all their profit currently is generated through the Carribean PTT's that they control...but they are betting their well-timed liquidation of their telco assets into content delivery (application) through DI, corporate hosting (application) through Exodus, and VoIP/VPN/MPLS/ATM applications through CW Global. In the fortune 1000 market, the convergence of communication is real and happening much faster than in the retail market and CWP is one of the clear leaders in this high-end corporate multi-media networking market. They have the products, services & the extensive world-wide network. Now they just have to patiently wait for their competitors to self-implode from the debts they gorged, and wait for the data price to stablize, all the while pushing their new applications & value-add network functionalities based on all-IP communication standard to drive down operating cost for their customers.
They are making a bold gambit to take a lion's share of the most lucrative communication market -- the world's fortune 1,000 communication market. If you have not heard of them too much recently, that is because they are no longer in the retail/consumer/small business market for data/voice which is a tough market to compete on applications or network quality (price is the only thing low-end cares about). |
