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Strategies & Market Trends : Technical analysis for shorts & longs -- Ignore unavailable to you. Want to Upgrade?

To: Johnny Canuck who wrote (33086)	6/27/2001 9:50:59 AM
From: j g cordes	Respond to of 70379

Harry, The optical industry, indeed much of the equipment side of the telco industry, is faced with a dilemma. In the initial phases of the buildout costs and pricing of equipment relative to bandwidth delivery were highly profitable and attracted huge sums of capital. However the curves of delivered bandwith versus the return on invested capital are moving apart .. as if each year one could tweak auto engines to get 50% per gallon increases in mileage... (even an aggressive public demand for car travel and an international highway buildout wouldn't close the return on investment gap). Capital is deflating into a black hole of increasing efficiency crushing many of the financial entities that thrived only a year ago. The current phase will be one of consolidation, with fewer companies. The telco's are in a position of not having to spend as many of the, heck .. lets call them "new age" companies, struggle to make ends meet. I think in the back cigar rooms they're thinking they will conserve capital expenditures in order to buy up failed infrasture and delivery.. buy up the customer base for nothing.