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Technology Stocks : Ciena (CIEN)
CIEN 243.42-0.2%Jan 16 4:00 PM EST
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To: pat mudge who wrote (2106)5/8/1998 9:24:00 PM
From: Miles Rhyne Hoffman, CFA  Read Replies (2) of 12623
 
Wall Street has reported that WorldCom expanded capacity (and thus bought networking products) two years in advance of need. They changed their expansion strategy to stay one year ahead of demand. Thus WorldCom has to use up one years worth of Ciena's product before resuming purchases. The contract was not lost, it was pushed back.

(Of course, this does not mean it has to restart).

FYI: I am still not sure why, but telecom companies appear to typically keep 50% of their fiber "dark" and in reserve for future needs. So WorldCom wanting to stay 2 years ahead of the curve makes sense and perhaps going to only one year is reasonable, especially in light of the MCI merger.

Does anyone know why telecoms keep "in the dark."
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