Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (9916)	2/17/2001 6:15:22 PM
From: abuelita	Read Replies (1) \| Respond to of 14638

Worst is yet to come: ottawacitizen.com ottawacitizen.com

To: Kenneth E. Phillipps who wrote (9916)	2/19/2001 10:44:49 AM
From: telecomguy	Read Replies (3) \| Respond to of 14638

Kenneth/Bosco, you know the fundamental problem right now is what I was afraid of all along.......DATA revenue which drove the capital infrastructure investments by the Carriers are NOT generating the required revenue. Coupled with insane long-distance price wars brought on by the de-regulation and market-share hungry Next-Gen Carriers who were funded by VC and primarily focused on market share has forced all the Tier I carriers to match the voice price downwards. The Carriers have to do the following in my opinion; 1) Rationalize the market....this is already happening as many small under-funded so called Next-Gen carriers are going bankrupt or selling out to Tier I carriers. 2) Stop the crazy price erosion of long-distance voice business (will happen once the market consolidates) 3) Figure out how to price data intensive services (Internet, vpn, e-commerce, web-hosting etc.) to generate the NECESSARY revenues to justify further expansion of capacity. The strange situation that we find ourselves in right now is that we have huge unsatisfied DEMAND for bandwidth but the ISP & Carriers do not KNOW HOW to charge for this service adequately to justify the CAPEX investment in their network. The faster NT can provide the technology/application to these Carriers so that they can charge for Data services in similar manner to voice service (essentially METERED based service as opposed to ALL-YOU-CAN-EAT), the faster the financial balance sheets of these Carriers improve to the point where they can once again justify the investment into their network. I was always somewhat concerned and confused as to how all these ISP's and Carriers were justifying their bandwidth expansion without the sophisticated billing/revenue generation systems that the voice business had always counted on. I guess we have the answer now unfortunately. Roth saw this problem over a year ago and perhaps should have tempered his forecast a bit and spoiled the party but it's really hard to do that when the customers were giving NT open cheque book as long as the bank/bond/equity market was co-operating. Besides, he was probably concerned about letting the cat out of the bag which could have deflated the NT stock price and prevented him from doing the necessary acquisitions to stay ahead of CSCO and LU. High-risk game with lots of ups & downs, this networking business but in the end, everything will sort itself out as there will still be Carriers left standing and the best technology/project mgmt company in the vendor space will win out.