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To: elmatador who wrote (1856)	12/19/2001 11:41:53 AM
From: Eric L	Respond to of 9255

Matador, << Shosteck: End of Telecomm Recession >> Herschel is sometimes "half a bubble off" to use an old carpenter's term. <g> - Eric -

To: elmatador who wrote (1856)	12/19/2001 11:49:42 AM
From: Eric L	Read Replies (2) \| Respond to of 9255

re: Reuters on 2002 Wireless >> Global Telecom Industry In For More Static In 2002 Reuters Dec. 17, 2001 Even after cutting tens of thousands of jobs and putting billions of dollars of spending on hold, the global telecommunications industry may not have hit bottom yet. With the U.S. economy still weak, traditional telephone companies such as Qwest Communications International Inc. have been cutting earnings forecasts, jobs and capital spending plans. That has pushed the makers of equipment that directs voice and data traffic to abandon ambitious expansion plans begun just a few years ago as they try to figure out how best to weather the slump. ``Given the uncertainty, I would not like to call a bottom,'' Ciena Corp. Chief Executive Gary Smith told Reuters last week after the optical networking firm warned it could lose money next year due to constrained spending by telecom companies. ``At some point next year, logic would tell you that this (capital spending) reduction is not sustainable,'' he added. One of the few bright spots is demand for wireless services in the United States, which could get a boost in 2002 from new technologies that will make it easier for consumers to surf the Internet on wireless phones. Handset giants Nokia of Finland and Motorola Inc. believe this could boost demand slightly. But skeptics say even this optimism could dim, delaying any industry rebound until late 2002 or even 2003. Industry executives are anxious for a turnaround after watching global telecom stocks as a group drop 27 percent this year through November and plunge 62 percent from a peak in March 2000, according to Merrill Lynch. U.S. telecom industry revenues are expected to rise only 7 percent this year and 6 percent in 2002, compared with a jump of 11 percent in 2000, according to J.P. Morgan. Part of the slowdown is due to slower growth in Internet traffic. The telecom industry's capital spending forecasts are even grimmer. Analysts expect a decline in 2002 of anywhere from 10 percent to 25 percent. Qwest last week cut its 2002 capital spending budget by about 24 percent, an action mirrored by others, including local phone company SBC Communications Inc. and long-distance voice and data company WorldCom Inc. ``Demand is lower, so capital spending is lower,'' Qwest Chairman Joseph Nacchio said. Many analysts, investors and executives believe a telecom rebound will begin in 2002, but there is little agreement on whether it will be in the second half of the year or at the tail-end, leading into 2003. Everyone agrees, however, that growth will return to the traditional range of 10 percent to 12 percent annually. Telecom equipment suppliers have been squeezed. Such giants as Lucent Technologies Inc. and Nortel Networks Corp. have racked up multibillion-dollar losses and slashed their work forces. Smaller players like Ciena are banking on phone companies' choosing their next-generation equipment over older, traditional gear to drive sales. Analysts and investors agree that telecom carriers will focus on equipment that generates revenues or cuts costs. ``The equipment companies ... need to learn to make money at current revenue levels -- and not expect much of an improvement next year -- as the way that they're going to get out of their troubles,'' said Naima Hoque, telecom analyst with Fleet Asset Management in Boston. Wireless technology firms have brighter prospects. They hope next-generation technologies will boost demand after a rocky 2001, a year in which an oversupply of wireless phones and a global slump in demand for telecom gear dragged down sales. ``The story this year (2002) is going to be how fast people are picking up (next-generation) systems,'' Leif Soderberg, senior vice president of Motorola's handset unit, told Reuters. In the United States, the largest firms will roll out or complete transitions to next-generation network technologies that promise high-speed, always-on Internet connectivity. Competing technologies will pit Cingular Wireless and AT&T Wireless Services Inc., the No. 2 and No. 3 U.S. wireless companies, against industry leader Verizon Wireless and No. 4 Sprint PCS Group. European operators rolled out their next-generation networks in 2000 and are counting on multimedia messaging to spur consumers to upgrade their phones. The companies are still burdened with heavy debts and are trying to create demand in a saturated market. In Asia, China is expected to be a fierce battle ground as wireless equipment firms vie for share in a high-growth market. Overall, Nokia, Motorola and Sweden's Ericsson have expressed optimism that the market will pick up next year with U.S. and Chinese demand leading growth. However, Jeffrey Schlesinger, wireless analyst with UBS Warburg, warns that consumer adoption of next-generation phones will depend on the attractiveness of new features. ``Most of 2002 is still going to be a transition year. The new products won't become significant in terms of the overall market until the very end of 2002,'' he said. << - Eric -