"Markets for fiber optic cable and equipment: an overview of the current status and near-term forecast"
By Richard Mack, vice president and general manager, KMI Corp.; George Miller, senior analyst, KMI Corp.
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In terms of growth relative to the previous year and in terms of the actual demand so far this year relative to what was expected, 2001 is unquestionably the worst year in fiber optics since fiber optics was an industry. It's the worst year in telecommunications since KMI has been tracking it (about 20 years).
We've seen some extreme changes in market capitalization, investment strategy, and business plans, and these tend to draw attention to worst-case situations. At the same time, some products and companies are experiencing positive growth and hitting their targets.
A United Telecom Council's study on fiber rates supports the view that there is no ubiquitous, uniform glut of capacity. "The conventional wisdom is wrong," said the council's president and chief executive Bill Moroney. "There is no glut. There is, in fact, an ever-increasing demand for fiber where not enough exists today -- in metro markets." The UTC's position is that there are still opportunities for new networks or new operators to prove-in offering fiber-based services. The recent entry of Consolidated Edison Communications into New York City's carrier's carrier business is one example.
Fiber optics industry participants can't avoid slogging through the inevitable shakeout that follows a period of unrestrained exuberance. It will (and already has) affected both carriers and manufacturers. And it's not over yet. Unfortunately, as a therapist put it, "the only way out of it is through it."
There's more to this story. For the details, visit www.lightwaveonline.com.
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"Regulatory and operations procedures obstructing progress in the U.S. metro/access markets"
By Mark Lutkowitz, VP of Optical Networking Research, CIR; Sam Greenholtz, Senior Analyst, CIR; and David Gross, Senior Analyst, CIR
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Introduction of new optical technologies and services are being substantially delayed at all four of the RBOCs (Regional Bell Operating Companies): Verizon, SBC, BellSouth, and the former US West (regulated portion of Qwest) because of onerous regulatory schemes as well as archaic network management processes. Given the dominant position of these carriers, these obstacles wind up stalling the entire U.S. metro/access optical networking market. Without dramatic changes in the status quo, there will not be sufficient volume deployment of innovative solutions to drive down costs, and successful competition from newcomers -- both in the manufacturing and service provider communities -- will continue to be seriously hampered.
Without extravagant alterations in the network management processes at the RBOCs and without the elimination of the morass of regulations, the U.S. metro/access optical market will never even begin to reach its full potential in terms of growth and innovation. Unit costs for the latest products and services will decline substantially, if the RBOCs are permitted to buy or offer them in much larger quantities a lot sooner. Unlike today, competition for business services will be enhanced as CLECs will be able to take advantage of lower cost products that they can more easily deploy in their greenfield networks. It is long past due for these artificial operations and regulatory impediments to be addressed in effective ways.
There's more to this story. For the details, visit www.lightwaveonline.com.
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"Communication industry trends"
By Stephen Montgomery, President, ElectroniCast Corporation
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The communications industry, over the past two decades, has shifted from an orderly, predictable, moderate-but-steady growth industry to a chaotic marketplace of rapidly changing regulations, complex business relationship realignments, explosive technology and dynamic growth.
Many simultaneous variables are melding, and dramatically changing the communication products market year-by-year. The successful competitors in this market will be those who are most adept at forecasting the changes and convergence in the customer base and in product performance requirements, and in quickly adjusting their marketing and product development to match these windows of opportunity.
The USA regulated telephone carriers face a daunting task, in trying to achieve a rate of growth and profits that will attract investors. They are dragged down by legacy equipment designed for the low data rate networks of a quarter of a century ago, tangled in their major investment in copper line transport, and shouldering a heavy load of regulations imposed by federal and state agencies. They are restricted from aggressive expansion predicated on rapid future expansion of services; thus, under attack from Internet competitors. Their charge rates are regulated to virtually assure a modest profit, based substantially on costs. Thus, as the Internet and other carriers/services siphon off more traffic (especially the high-profit voice traffic), telco revenue will tend to shrink, losses will loom, regulators will approve higher charge rates, fueling further loss of subscribers.
While the challenge is most visible in the US, PTTs in other world regions will also face these problems.
There's more to this story. For the details, visit www.lightwaveonline.com. |
