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Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: JAPG who wrote (47092)	9/25/2001 6:12:02 AM
From: techreports	Read Replies (1) \| Respond to of 54805

I understand that there is a glut of long-haul fiber. The bottleneck today seems to be in the "last mile" broadband access to the home or office. Companies and solutions that provide a fast and economical solution to this problem are the ones will reap first the benefits of a surge in video conferencing demand. It's called DSL and Cable for consumers and T1 & T3 for corporations. T3 offers 45 megs per second. I don't really call that a bottleneck..DSL can get over 30 megs per second.. If corporations use these T3 lines to do video conferencing, it will have huge impacts on the core and metro networks, which is where JDSU makes its money. Eventually, JDSU could move into the last mile with FTTH. Just 100,000 people viewing a 3" streaming video will consume 6% of the total bandwidth. Just imagine millions of video calls (full screen at 30 fps) running over the internet? If video confernece doesn't take off..no biggie..there are other killer apps to create demand for bandwidth.. sorta like buying csco and msft stock back in the very early days of the internet. It was hard to predict who the winners were in the internet space, but Microsoft and Cisco were going to benefit. If the internet didn't take off, Microsoft and Cisco still had a viable business.. Fiber-to-the-home (FTTH) is costly and will take time as cable companies need to upgrade first their existing plant to enable two-way communications. IMO this is their first priority. A hybrid "fiber-wireless" could be a good (fast and cheap) alternative: fiber to the node and (from the node) broadband wireless to the home or office. Companies like Sprint and Worldcom have plans along this fiber-wireless solution. When the "last mile" bottleneck is sorted out, then demand for more fiber will follow, which is when JDSU will benefit most. As per today "the last mile" remains an elusive challenge although progress is being made every day. All of the above IMHO. growth in carrier spending has been around 14% from the early to mid 90s. In 1999 and 2000 it was like 25%. The last mile was still a bottleneck in 1999 and 2000, but that didn't stop record growth in the core and metro. Or the quadrupling in traffic in the past few years..which is the main reasons these networks were upgraded. When the "last mile" bottleneck is sorted out, then demand for more fiber will follow, which is when JDSU will benefit most. As per today "the last mile" remains an elusive challenge although progress is being made every day. JDSU doesn't make fiber. They make the components that light the fiber. There is a glut of fiber in the ground, but it isn't carrying any data. Much of the cost in one of these networks are the components, not the actual fiber. It makes more sense for a carrier to stuff as much fiber cable into the ground as possible. Even if they know they'll never need it because it is more expensive to come back and redig holes in the ground to stuff more fiber. Corning makes fiber, so they are the ones that should be effected the most by the glut. That said, no carrier is going to run its network at 100% capacity. More like 70 to 75%.. With internet traffic doubling around twice every year, it shouldn't take long before the carriers are running at 70% capacity again. This process should be accelerated once some of these start-up carriers go bankrupt leaving their business for the Worldcoms and Sprints of the world.