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Strategies & Market Trends : The New Economy and its Winners -- Ignore unavailable to you. Want to Upgrade?


To: fedhead who wrote (10390)1/23/2002 11:17:53 AM
From: Bill Harmond  Read Replies (3) | Respond to of 57684
 
Get this, Anindo:

The Internet has continued to grow, even in the face of economic slowdown and terrorist attack, according to new traffic measurements released by Internet founder Dr. Lawrence Roberts. His latest data from the 20 leading tier 1 IP network service provider networks in the U.S. reveals that the Internet has continued to grow at roughly the same growth rate it’s been averaging since it began growing aggressively in the early 90s. Over the almost two-year period of Roberts’ study, April 2000 through the present, Internet traffic has been found to be growing annually by a factor of three. Roberts’ findings run counter to some networking vendors, analysts and media that have suggested the growth of the Internet is slowing. According to Dr Roberts, the confusion stemmed from statements and speculation on the capacity of carrier networks, not the traffic across them.

The biggest implication of his findings is that carriers are going to be spending again soon. There are scientific limits to how much their networks can handle before performance degrades to levels that customers will no longer accept. His studies assume a worst case scenario where ISP will not build additional routers until reaching 40% utilization rate (normal growth rate would be 30% utilization rate).

BAS Analysis: If Dr Roberts’ finding is accurate, second chart of Internet traffic is suggesting a stabilization from the Internet bubble bust effect is pretty much absorbed by the normalized growth by 4Q01. Going forward, we should see expect a 3x-growth rate for the next few years according to Dr. Roberts. Based on his capital spending chart using the worst scenario (chart 3), he is suggesting spending patent to bottom in 1Q02 and recover from there on. In conjunction with network players guidance of flat to down 10% so far for 1Q02, these data points may be suggesting a bottom is close for the telecom networks and spending may be back-end loaded towards 2H02 even though total capex is still to decrease by 25% in 2002 from 2001. Last week of January into first week of February should allow us to gage the telecom spending patent as the top players announce their 2002 plans.


Banc of America Securities, 1/21/02



To: fedhead who wrote (10390)1/23/2002 12:34:21 PM
From: Lizzie Tudor  Respond to of 57684
 
Maybe it is discounting a double dip recession

I have heard people from the telecom infrastructure biz discuss this possibility. People from software would say no way... we are so much better off across the board than last year, fundamentally. Its just not showing up in every stock, thats the problem.
L