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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: MikeM54321 who wrote (8555)	9/20/2000 6:42:17 PM
From: transmission	Read Replies (3) \| Respond to of 12823

CEOs Discuss Strategies for Realizing the Value of Convergence Posted on September 20, 2000 by Jeanne Gellman NEW YORK - At the PricewaterhouseCoopers 2000 Convergence Summit held in New York on September 19, 2000; CEO's representing the top entertainment, media and communications companies explored how to realize value from the coming together of content, communications and technology. Two themes that emerged during the Summit are that the demand for capacity and content is seemingly infinite and that the key to being successful in these thriving and converging communications industries is developing a focussed business strategy. Gary Cohen, Co-Chief Operating Officer of Global Crossing Ltd., believes that the convergence of the telecommunications, media and entertainment industries has created a cycle that is fueling an ever increasing demand for capacity and content. The last mile, according to Cohen, is being widened not just in terms of bandwidth, but also in terms of how it is going to be used. This is causing greater activity on all networks which is leading to a greater demand for capacity and content. The result, said Cohen, is that "there is an insatiable appetite for broadband to come to all of our neighborhoods." Edward Breen, Executive Vice President and President of the Broadband Communications Sector within the Communications Enterprise of Motorola added that this growth has moved faster than anyone had expected. For example, said Breen, Motorola was surprised by the immense demand for cable-modems in North America. "Motorola will supply North America with 8-10 million set-top boxes this year," said Breen. "Our projections a year ago were half that amount." Breen believes this demand will only multiply further as more markets become fully digitized. Supporting such optimistic perspectives on the future of the telecommunications and media industries, the PricewaterhouseCoopers' Global Entertainment and Media Outlook: 2000-2004 predicts that the global entertainment and media industry revenues will grow at a seven percent annual rate to near the $1 trillion dollar mark by 2004. The Global Entertainment and Media Outlook: 2000-2004 also forecasts that double-digit Internet and cable industry growth will propel the United States to a $445 billion industry total in 2004. Asia/Pacific, stoked by double-digit increases for station, cable and DBS distribution and Internet spending, will grow nearly as fast as the United States -- peaking at $217 billion in 2004. Continuing the trend, the outlook states that double-digit Internet growth will carry Europe to a $313 billion total five years from now. According to Kevin Carton, Global Leader of PricewaterhouseCoopers Entertainment and Media Practice, "These forecasts show the significance of the entertainment and media industry on the world economy and the role digital technology has in driving that growth. The Internet is clearly the main catalyst for this economic surge, and we estimate this segment of the market alone will be worth $75 billion within five years." Copies of the Global Entertainment and Media Outlook: 2000-2004, which was released at yesterday's Summit, can be obtained by visiting ..\..\..\From the Floor\www.pwcglobal.com\outlook2004. Staying Focussed The flip side of all this good news is that telecommunications and global entertainment and media companies are facing some new challenges. With so much consumer demand for content and capacity, many of the speakers at the Summit warned that companies should avoid the temptation to move too quickly to expand into new lines of business outside their own area expertise. In short, the key to success in this dramatic, unpredictable and constantly changing business is staying focussed. According to Ivan Seidenberg, President and Co-CEO for Verizon; focus both in terms of business and geographic presence is at the core of Verizon's strategic plan. Rather than spreading into as many overseas markets as quickly as possible, Verizon is focussing on becoming a tier one player in North America first. "You have to be strong someplace to be global," said Seidenberg. To this end, although Verizon has a presence in 30 countries, the company plans to focus on building-up it's customer base in North America first and will then leverage the traffic from that region to expand into other parts of the world. Seidenberg expects it will take another 5-10 years for Verizon to become a truly global company. In addition, Seidenberg said that Verizon "wants to do what its always done but better." This means that Verizon will "need to stop itself from dabbling in things it shouldn't do." Therefore, Seidenberg sees Verizon's role in the entertainment and media side of the industry as providing access to as many consumers as possible. Rather than creating content, "we want to create eyeballs," said Seidenberg. Motorola's Breen agrees that the convergence movement doesn't necessarily mean that telecommunications companies should start providing content or that content providers should start offering Internet service. Similarly, Cohen stated that Global Crossing knows that it's role is to be an enabler for the growth of capacity and services and will continue to focus on building-out networks rather than moving into other lines of business. "Our ambitions," said Cohen, "are limited to what we have the skills and capability to deliver." Several speakers also believe that companies must focus more than ever on fostering consumer loyalty at a time when consumer have more choice than ever before of content and how it will be delivered. According to Joshua Sapan, President and CEO of Rainbow Media Holdings, Inc., "We can't force people to move from one platform to another, and we can't tell people where to go. They are going to go where they want." Therefore, Sapan believe that in such a highly competitive market good branding and providing a superior consumer experience is essential.

To: MikeM54321 who wrote (8555)	9/20/2000 11:02:46 PM
From: justone	Read Replies (1) \| Respond to of 12823

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To: MikeM54321 who wrote (8555)	9/22/2000 9:44:23 AM
From: justone	Read Replies (1) \| Respond to of 12823

Mike: Taking the numbers in your post from Gartner Group's projections, I calculated the yearly sequential growth in those areas, since that is perhaps more important in evaluating the value of stocks. The fastest growing areas are residential broadband access (88% four year growth average), followed by wireless (19% four year growth average). Only these areas can really justify high multiples of stock prices. I doubt if this is a surprise to many. Note the Gartner Group's data does not make a complete picture: I think services will be bundled, so you should add services such as cable TV, interactive TV, internet access, VPN services, etc. But when you add these, I still think residential access, particularly cable access, would be by far the largest growth area. Local Year $B Percent growth 2000 120 2001 125 4% 2002 140 12% 2003 155 11% 2004 170 10% Long Distance 2000 108 2001 110 2% 2002 115 5% 2003 121 5% 2004 126 4% Residential High-Speed Access 2000 2 2001 6 200% 2002 10 67% 2003 15 50% 2004 20 33% Wireless 2000 60 2001 75 25% 2002 91 21% 2003 115 26% 2004 120 4%

To: MikeM54321 who wrote (8555)	9/25/2000 1:56:28 PM
From: MikeM54321	Respond to of 12823

Re: Optical Access/Edge/Metro - Stats from CIR Thread- I heavily edited down this article found on the FCTF thread. I just wanted to post what I thought were the highlights of the PR. IMHO, the article is generally correct in what is facing those equipment providers selling into the metro space. I still am of the belief it will be a larger market than this article predicts. Ironically, this article puts the optical metro market at double what I read about a month ago. So it's heading higher. -MikeM(From Florida) ********************************** Fiber Optic Metro/Access Euphoria Should Be Tempered by Service Provider Caution** Says New Report from Communications Industry Researchers(CIR) CHARLOTTESVILLE, Va. Sept. 20, 2000-- Overly bullish forecasts for the optical metro/access equipment industry ignore the fact that the potential market for such equipment is dominated by well-established service providers that will continue to be very cautious in their deployment of new platforms. As much as 70 percent of the sales of optical metro/access equipment may come from traditional carriers with conservative management and an ongoing commitment to SONET. Nevertheless, the reports goes on to say that there will still be significant growth occurring in the metro/access market over the next few years. Incumbent providers tend to be hesitant to adopt new solutions because of the start-up costs associated with a new technology approach and the fear that they could be stuck with a platform that may not satisfy the demands of their end users in a couple of years. Also, for reasons of corporate culture, the new unregulated businesses within the ILEC organizations will be almost as conservative as their regulated businesses in deploying the latest optical metro/access gear. Other obstacles preventing some of the bigger carriers making major leaps to the latest solutions in a hurry have to do with both the impact of legacy gear as well as with their requirements to offer a high level of quality of service. Room for new products is limited by the extremely low rate of obsolescence in the public telecommunications space. In addition, some network planners can take many months to test a new device to ensure that it can guarantee bandwidth to its customers with an extremely high level of reliability. Fears Abound, But Growth Expected Based on what service providers have told CIR, the successful optical metro/access equipment vendors will be those who understand these factors and build them into their business plans. Companies that fully acknowledge the long lead times and ongoing commitment to SONET legacy networks, will be the ones that survive the inevitable shake out in the optical metro/access space. CIR believes that there are companies today who don't fully understand the true dynamics of the optical metro/access market and who will ultimately fade from view, rather than issue their promised IPOs. The report notes the fate of Atmosphere Networks, which took some major strategic missteps in the optical access space and was ultimately swallowed up by Ditech at a very low price, should serve as a cautionary tale to both industry executives and investors. The optical metro/access market will grow from over $1.2 billion in 2000 to $3.5 billion in 2004. The shift to IP and the growing willingness of even traditional service providers to use DWDM, even though it will be mostly for fiber exhaust applications at first, will be important factors in promoting this growth. And while CIR notes that "there is an extraordinary amount of vaporware, when it comes to systems, features or both," it also expects to see significant deployment of next-generation optical metro/access systems beginning in 2001. CIR also expects to see important niche applications for PONs and optical FDM solutions emerge in the same time frame. Finally, the new CIR report claims that wavelength protection has yet to be delivered, but will emerge as an important issue for some end-user communities -- notably the financial and medical communities. Realism and the Optical Metro/Access Space CIR points out that its numbers were based on a primary survey of service provider needs and not on vendor hopes and expectations.

To: MikeM54321 who wrote (8555)	9/25/2000 1:57:19 PM
From: MikeM54321	Read Replies (2) \| Respond to of 12823

Re: Optical Access/Edge/Metro - Stats from Pioneer Thread- Now in a follow-up(again thanks to ftth on the FCTF), here's another view of how large the metro optical market (anything outside of the core, long-haul, backbone, etc.) will be. It's not easy to define exactly what the metro space involves so that is part of the confusion. But IMVHO, I'm more prone to believe these figures but it's really just a guess for now. Overall I just find it hard to imagine the take rate on broadband not having a crushing effect on the metro markets. I don't understand it well enough so I can only make very general statements. Consider the MSOs bringing the Internet to the 70 million couch potatoes STBs(TVs), the telcos supposedly surpassing CM with DSL, and then add the super hype about mobile wireless. All would seem to indicate to me a major traffic jam in the edge/metro markets. -MikeM(From Florida) PS Edit: I forgot the throw in one of my legacy investor comments. Check out the category under SONET. Good news for legacy investing and maybe explains the relative lack of media hype. ********************************* North American Optical Edge Systems Market to Grow to More Than $8.3 Billion in 2004** According to Pioneer Consulting CAMBRIDGE, Mass., Sept. 13-- The North American market for optical edge systems, including next-generation SONET, Integrated Metro DWDM and Metro Optical IP will create a market of $1.15 billion in 2000 and reach more than $8.3 billion by 2004, according to Pioneer's new report, Optical Edge Networks: Market Opportunities for Integrated Optical Network Solutions in Metro Networks. ___________________ North American Optical Edge Systems Market(in billions) Optical IP 2000 $0.11 2001 $0.18 2002 $0.43 2003 $0.71 2004 $1.08 Multiservice DWDM 2000 $0.11 2001 $0.20 2002 $0.42 2003 $0.66 2004 $0.92 Multiservice SONET 2000 $0.93 2001 $1.43 2002 $2.43 2003 $3.94 2004 $6.30 Total 2000 $1.15 2001 $1.81 2002 $3.28 2003 $5.31 2004 $8.30 ________________ The optical edge networks market is slowly coming into focus, though a definition of this market will continue to evolve as systems move from the labs into the field and carriers determine how and to what extent these integrated systems will be deployed. Simply put, optical edge network systems are being developed to address the shortcomings of existing metro networks and their voice-oriented technologies and architectures. Optical edge network systems combine scalability of the optical layer (Layer 0), with processing of Layers 1, 2 and/or 3 to provide a single network element that performs the functions of many, simplifying provisioning, network management, and ideally reducing both first costs and lifecycle costs for carriers. The importance of this integration is directly related to the profound changes underway in both public and private networks today, in which an inexorable migration from circuit switching to packet switching is taking place, and the prominence of data traffic is requiring a complete rethinking and reengineering of networks. It is quite possible, therefore, that the optical edge market is only the beginning of an evolutionary "de-layering" of the network, in which IP emerges as the dominant services layer, residing on top of a thin adaptation layer such as MPLS carried on a configurable optical layer. This explains why so many optical edge systems seem to be hybrids; the market is not ready for the ultimate IP-over-optics solution and instead requires an interim step in which legacy services are accommodated in their native format over a common transport platform. Optical edge network equipment vendors/manufacturers and service providers profiled in this report include: AT&T, Allied Riser, Alidian Networks, Appian Communications, Astral Point Communications, ATG, Broadband Office, Broadwing, Centerpoint Broadband Technologies, Chromatis Networks, Ciena, Cisco Systems, Coriolis Networks, Cyras Systems, Extreme Networks, Fujitsu Network Communications, Global Crossing, Geyser Networks, Kestrel Solutions, Lantern Communications, Level3, Lucent Technologies, LuxN, Luminous Networks, Marconi Communications, Mayan Networks, Metro-Optix, Nortel Networks, Quantum Bridge, Qwest, Redback/Siara Systems, Sirocco Systems, Sprint, Terawave, Tropic Networks, WorldCom and Zaffire.