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

To: Lizzie Tudor who wrote (18095)	9/5/2003 11:16:53 PM
From: MSI	Respond to of 57684

Re:globalization, if you want to read an excellent book, "Blowback", by Chalmers Johnson, describes the damage being done to various economies by globalization, and what to expect. as we can see from the jobs report today this globalization has dire consequences, hopefully we can handle it

To: Lizzie Tudor who wrote (18095)	9/6/2003 2:09:57 AM
From: Bill Harmond	Read Replies (1) \| Respond to of 57684

AT&T Official Expects Rates For Bandwidth to Fall Further By PHILLIP DAY Staff Reporter of THE WALL STREET JOURNAL SINGAPORE -- Companies will never get back the billions of dollars they spent laying the groundwork for global data networks, and more of them are likely to go under or be taken over, as the price of bandwidth on those networks continues to fall, a senior AT&T Corp. executive said Friday. Justin Sims, the company's senior vice president responsible for AT&T's business outside the U.S., said he expects the current trend of consolidation will continue among the companies who laid thousands of miles of fiber-optic cables in the boom days of the late 1990s and the early part of this decade. "Already a fairly significant number of the smaller players have either declared bankruptcy and exited the market, or been acquired. … And I think more will occur," he said in an interview with The Asian Wall Street Journal. Companies that invested in building those networks no longer expect to make back their investments, he said. Instead, they're just trying to recoup the money they spend keeping their networks running -- "operations and maintenance costs and the incremental costs of supporting a customer." Mr. Sims said bandwidth prices, the charge for transmitting data from place to place, will continue to fall until they are equal to the costs of keeping the networks running, costs that increase as new customers are added. From AT&T's point of view, it makes sense to focus on being a customer of those networks, rather than buying distressed network operators, Mr. Sims said. Although AT&T has itself invested in networks with 300,000 miles of undersea cable, and has the financial resources to buy up cable operators if it wanted, that doesn't make sense in the current market, he said. "We continue to look at distressed assets, both in Asia and other parts of the world, but each time we look at those distressed assets, we generally conclude that it is cheaper to lease infrastructure than it is to own," he said. Leasing even makes more sense than buying an operator for a dollar and incurring its operating costs, he added. AT&T's business is increasingly focused on providing services to its data customers, helping them to set up and operate systems that use the global data networks. And that business is starting to improve after years of gloom, he said. Customers have "weathered the economic storm over the last two or three years," a time when they were very cautious about new investments. Now that the economy is starting to recover, AT&T is seeing "customers spending more on applications, more on updating their networks." That new growth in the market, unlike growth from market-share gains at the expense of competitors, "is a relatively new phenomenon for us in the last two or three years," he said. And the trend is especially apparent in Asia, Mr. Sims said, with business in the region now growing at a "double-digit" pace. Write to Phillip Day at phil.day@wsj.com Updated September 5, 2003 5:42 a.m.