Bandwidth Bubble Bust by Grahame Lynch
GL’s 133 page book reviews the rise and fall of the global telecom industry. It includes wireline, wireless, submarine and satellite. You will find comments on Inmarsat and Globalstar, Optus and Telstra, Level 3 and Global Crossing, Nokia and Ericsson, Vodafone and VoiceStream, Qualcomm and Motorola, and, yes, even on George Gilder, to name just a few. Herein lies its strength and its weakness.
The author, a “world leading telecom commentator” , does exactly that: he comments on many of the dramatic events that have devoured enormous amounts of capital. And because of his enormous knowledge and experience you are bound to find something interesting that you have not known before, even if you have followed the industry (unless, perhaps, you have followed most of the author’s printed articles). He points out failed business models with great clarity and describes executives who refuse to change their opinion even in the event of obvious market failure. He finishes with a sinister prognosis for the telecom industry for the mid term future.
What may be missing in the book is a deeper investigation of the details of the historic annihilation of hundreds of billions of capital. Firstly, you cannot do this in 133 pages. Secondly, at least in the wireline area, we have now several companies trying to emerge from Chapter 11 (e.g. WorldCom, Global Crossing, Willaims Communications). Therefore it would be highly interesting to have a better understanding, whether their business models will work well when the debt is taken away and whether there are differences between the quality of their models. Other questions remain unanswered, e.g. will European telcos consolidate like the RBOCs in the US?
Maybe it is asked too much from one book to be the definitive history of one of the greatest bubbles. Lynch’s book is a page turner that you will enjoy thoroughly. |
