JAMES : Did you pick up any POCI ?
Enclosed: recent article from FIBER OPTICS ONLINE :
BE WELL
BKW
**********************************************************
.S. Bancorp Piper Jaffray Report Predicts Revolution in the Communication Services Industry
12/30/99
MINNEAPOLIS, Dec 30, 1999 (BUSINESS WIRE) -- The traditional communication services industry is plagued by slow growth, low innovation, and high barriers to entry. As we exit the era of limitations and enter the era of abundance with regards to bandwidth, the benchmarks by which we judge the traditional telephone companies become outdated. Benefiting from this transformation in industry structure will be the more nimble companies leveraging the outsourcing trend occurring in the new disaggregated industry, according to a new research report released today by U.S. Bancorp Piper Jaffray.
The 278-page report, "Communication Service Providers: The Next Gen Service Provider Marketplace," highlights this and many other trends in a market encompassing $750 billion in sales and $2.5 trillion in market capitalization worldwide.
"We're in the midst of a massive transformation from circuit switched to packet-based architectures, and from analog to digital. These trends threaten the viability of the established players, while creating major new market opportunities for more agile competitors focused on next-generation services," said Andrew Schroepfer, vice president and senior equity research analyst at U.S. Bancorp Piper Jaffray and the author of the report.
The U.S. Bancorp Piper Jaffray report notes that the convergence of wireless/wireline, local/long distance and voice/data services renders the historical means of viewing the telecommunications market obsolete. Instead, Schroepfer proposes a "new dividing line in communications services that views carriers as providers of services either to end-users or to other carriers." Carriers are outsourcing non-strategic business operations that do not help their brand recognition or profitability. Outsourcing drives a reshaping of the service delivery model, which U.S. Bancorp Piper Jaffray says results in a disaggregated industry framework that incorporates the key changes brought on by the Internet and the move towards a data-dominated world.
"The new marketplace simply will not support more than a few global leaders. Accordingly, we are witnessing a consolidation spree combining the required components, but we believe the true value creation in the marketplace will be amongst the new entrants," says Schroepfer. Other highlights from the report include:
-- Hosting centers will continue to be built in mass and will emerge
as the new central office of the future of communications;
-- Per minute pricing wars will hurt the industry in the short term,
but will drive growth over the long term as the bandwidth glut is filled by newer bandwidth intensive services;
-- Service offerings from which carriers derive revenue will be
substantially different in 10 years led by the introduction of numerous enhanced services;
-- Product features will continue to evolve into subscription
services through Application Service Providers (ASPs);
-- Senior executives from traditional telco leaders will continue to
leave for newer businesses, validating these new models turning great business plans into great businesses;
-- net New Minutes (nNM), the use of communications from the PC,
will be a significant driver of communications as new services and new usage originates from this new channel;
-- IP will win the protocol layer, optical fiber will win the
physical layer and the layers in between (ATM and SONET) will be eliminated for all but the interface;
-- Carrier-sourcing will explode as outsourcing drives carriers
towards a focus on brand and profitability;
-- Bandwidth exchanges will emerge to enable real-time provisioning
of services and complete the disaggregation of the industry between bandwidth providers and brand name service providers.
"We have a brief window before the next-generation communications infrastructure design is complete," said Schroepfer. "During that time, many new leaders will emerge creating tremendous opportunities for investors as this dynamic industry takes its new form."
Schroepfer's current coverage list includes: DeltaThree.com (NASDAQ: DDDC - $26 7/8 - (a)(b)), Exodus Communications, Inc. (NASDAQ: EXDS - $87 3/16 - (a)), iBasis, Inc. (NASDAQ: IBAS - $31 3/4 - (a)(b), Level (3) Communications, Inc. (NASDAQ: LVLT - $83 1/4 - (a)), Metro One Telecommunications, Inc. (NASDAQ: MTON - $11 3/4 - (a)), Net2Phone, Inc. (NASDAQ: NTOP - $48 1/4 - (a)), NorthEast Optic Networks, Inc. (NASDAQ: NOPT - $62 1/2 - (a)), Qwest Communications International Inc. (NASDAQ: QWST - $41 57/64 - (a)).
Copies of the 278-page report or the 26-page executive summary can be obtained by contacting your U.S. Bancorp Piper Jaffray representative. Members of the media can request copies of the report by contacting Elizabeth Child at 612/342-6594 or echild@pjc.com. The report may be purchased by nonclients on the web at multex.com.
U.S. Bancorp Piper Jaffray, a subsidiary of Minneapolis-based U.S. Bancorp, provides a full range of investment products and services to businesses, institutions and individuals. The company's investment banking business has grown exponentially in the last several years by focusing on the needs of growth companies in the health care, technology, financial institutions, consumer and industrial growth sectors. U.S. Bancorp Piper Jaffray has a national reputation for its expertise in fundamental research and equity and debt financing. U.S. Bancorp offers a comprehensive range of financial solutions through U.S. Bank, First American Asset Management, U.S. Bancorp Libra Investments and U.S. Bancorp Piper Jaffray. For more information, visit our Web site at www.piperjaffray.com.
(a)U.S. Bancorp Piper Jaffray makes a market in the company's securities. (b)Within the past three years, U.S. Bancorp Piper Jaffray Inc. was managing underwriter of an offering of, or dealer manager of a tender offer for, the company's securities or securities of an affiliate.
Nondeposit investment products are not insured by the FDIC, are not deposits or other obligations of or guaranteed by U.S. Bank National Association or its affiliates, and involve investment risks, including possible loss of the principal amount invested. Securities products and services are offered through U.S. Bancorp Piper Jaffray Inc., member SIPC and NYSE, Inc., a subsidiary of U.S. Bancorp.
Copyright (C) 1999 Business Wire. All rights reserved.
Distributed via COMTEX.
|
