For some, 2003 brought sighs of relief, as in, “Things finally stopped getting worse.” Yet others couldn’t seem to stop the misery.

We tried to find 10 really good rebound stories in 2003. Okay, so rebound might be a bit strong. We tried to find folks who no longer felt like they were roasting in the Belly of Hell.

We only found nine. And that was pushing it.

So, was 2003 the litmus test for survivability? Are the companies that managed to turn things around in 2003 ready to gain market share and stature in the raging recovery to come? Will the rest of the others slide into the abyss? Hey, that sounds good to us.

In that spirit, we’ve put together a list of the most prominent rebound stories in 2003.

No. 9 Euro CarriersWe’ve lumped these Volker together just because they tend to travel in packs, eating in the same fine restaurants while vacationing on the Mediterranean. The most prominent recoveries have come at BT Group plc (NYSE: BTY; London: BTA) and Deutsche Telekom AG (NYSE: DT).But the story is a common one: European incumbents, which took on massive amounts of debt when they overpaid for wireless spectrum in the late '90s, are gradually bouncing back, with new growth in corporate data services. As a whole, their incumbency is protected better than those in North America, where the RBOCs are being attacked on all sides. Look for the Euro carriers to benefit from the uptick in business activity and Ethernet services, which are growing faster in Europe than they are in the U.S.

No. 8 Corning Inc. (NYSE: GLW)

At one point in early 2002, Corning definitely looked to be going the way of the Romanovs. It certainly did its best to dim prospects in the town of Corning, N.Y., by laying off thousands of employees and shedding business units, including optical components divisions and investments.

Ex-CEO John Loose showed some premature hope in 2002 as he thought the company was turning quicker than it was (see Corning: 'We've Hit Bottom'). He was later axed and given an attractive -- dare we say excessive? -- retirement package.

Coincidentally or not, things finally got better in the post-Loose (the Tight?) period. In 2003, the company’s strategy of massive cutbacks in headcount, plants, and component technology finally started paying off. The company stopped losing money, and it has been fortunate in being able to fall back on its healthy Liquid Crystal Display (LCD) business. Even things in the fiber business are finally starting to look up, with it getting a piece of the FTTP action at Verizon Communications Inc. (NYSE: VZ). Its latest quarterly results showed a net profit and beat expectations.

Then there’s the share price. If you bought the stock at the $2 it was trading at in late 2002, you got yourself a five-bagger, because it’s now trading at $10.

Now if only this FTTP really takes off…

No. 7 Alcatel SA (NYSE: ALA; Paris: CGEP:PA)

Alcatel? What are we smoking, you ask? Gauloise, of course!

We know some folks that really hate Alcatel. Just hate it. In fact, there were quite a few folks on Wall Street that expected it to pull a Vivendi and completely blow up. If you look at it closely, though, the Frenchmen aren’t doing so badly. Take a look at the spaces in which they dominate: Access technology and DSL gear. That’s not a bad place to be. Couple that with Turnaround No. 9, the Euro Carriers, and things start to look better.Life in the new telecom world is all about fortifying your position in the remaining markets, and in that regard Alcatel hasn’t given up any ground in markets in which it leads. The only question is whether it will finally make more inroads in the MSPP and edge routing space its been pursuing all these years.

Most importantly, they've returned to profitability. In October, the company reported a two-and-a-half year high in earnings, logging €160 million (about US$200 million today) in income from operations during its third quarter. And think about the fact that for a lot of their business they get paid in euros, which is a lot better than U.S. dollars these days.

But the real bonus point for Alcatel is that they’ve managed to recover when their key executives have such odd names: There’s Serge Tchuruk, the CEO; Etienne Fouques, the executive VP in charge of networking; and Jean-Pascal Beaufret, the CFO.

No. 6 Nortel Networks Corp. (NYSE/Toronto: NT)

Here's another company that many folks thought would soon be shopping for tombstones. In 2003, “stabilization” was the buzzword for Nortel.

So, it hasn't exactly come back with flying colors, and much of the energy from the late '90s Nortel is gone. But so far, the restructuring plan has worked out well. After closing three profitable quarters in the beginning of the year, Nortel executives said following the third quarter that they expect the company to close 2003 with the first full-year profit in six years. That’s the end of one long Canadian winter.

Now that it’s streamlined, Nortel looks to be positioned nicely in markets for multiservice Sonet, wireless equipment, and VOIP gear. Granted, the routing story is as weak as ever, and it’s not much fun playing No. 2 to Cisco in the enterprise networking market. But the important thing is that it’s no longer bleeding buckets of cash.

No. 5 Light Reading Index

Things were pretty grim there for a while. The Light Reading Index was launched in January 2000 at 1,000 and rose to an all-time high of 1,368 in August 2000. By Sept 2002, it had dipped below 100, hitting an all-time low of 66. Good thing that when we started the Index, we chose 1,000 rather than 100 as the starting value, eh? Otherwise we could have become a penny stock.

Anyway, in 2003 the Light Reading Index went on a rampage, starting at about 100 and closing out the year at a year's high of 187. Are we back to the bubble? Not even close. Though the Index has nearly doubled this year, keep in mind that it’s still down more than 86 percent from its peak. When you’re looking at this kind of market activity, it might help to remember Bill Parcell’s football strategy: Play solid defense, and think about grinding out gains 10 yards at a time before going for the long one. Pigs get slaughtered.

No. 4 Foundry Networks Inc. (Nasdaq: FDRY)

Foundry Networks looks to have had one of the best years of all the small-fry Ethernet switching players trying to catch up with Cisco.

Credit’s due to Bobby “The Hummer” Johnson, who by all measures is as focused as a Navy Seal (see Top Ten Movers and Shakers in Telecom). In 2003, Foundry surprised everybody by beating revenue and profit targets. Here’s a company that’s actually growing at a decent clip. It’s all the more impressive considering that during the bubble days, Foundry sold many products into the Internet data center market, which turned like the weather in Chicago.

With the company’s new Mucho Grande product out the door as it tries to establish a foothold in the emerging 10-Gigabit Ethernet market, the company’s positioned well to grab some share from smaller players in 2004.

No. 3 Talk America Holdings

We had to find a nice carrier recovery, which was tough indeed. But clearly we haven’t been writing enough about the stealth recovery in the CLEC market. Because here’s quiet little Virginia-based Talk America Holdings, a service provider that markets phone and data services to consumers and small businesses.Check this out: Talk is profitable. Very profitable. Who knew? It booked $189 million in net profit over the four quarters ending on Sept. 30, 2003. Revenues actually rose 19 percent over the prior year. This reverses the big hit the company took from 2001 to 2002, when its revenues declined from $495 million to $317 million. Now that it’s turned the corner, its shares, which definitely took a hit in the telecom recession, have rebounded. Talk’s stock more than tripled in 2003, from a low of about $3.50 to its recent price of $11.56.

We’re embarrassed to say we missed this story. But we’ll pick it up in 2004.

No. 2 Sonus Networks Inc. (Nasdaq: SONS)

Talk about a roller coaster. Sonus Networks has provided its fans plenty of thrills and spills. A year ago when Sonus's business was in the dumps, well known Massachusetts technologist Hassan Ahmed, Sonus’s president and CEO, had trouble getting invited to a party. Now everybody’s his best buddy. Mention VOIP in January of 2003 and all you would have gotten was some funny looks. Now it’s the buzz-acronym du jour. Go figure.

So how’d that happen? Simple: In the beginning of the year, Sonus had no deals. Now it’s got a bunch of them, including one with the all-powerful Verizon Communications. Hey, softswitching is suddenly in. Makes you wonder if executives at Cisco, which was once rumored to be close to buying Sonus, are kicking themselves for this one. Like the pimple-faced geek in high school that’s suddenly transformed into a college-aged superstud, Sonus Networks now has everybody’s attention. Its stock price tripled in 2003. Let’s hope Sonus can keep it up, for the sake of everybody’s sanity.

No. 1 Cisco Systems Inc. (Nasdaq: CSCO)

Some would argue that Cisco isn’t really a turnaround story because it never seemed to fall as hard as anybody else. But does anybody remember the third quarter of 2001, in which the company announced a net loss of $2.69 billion, including a $2.2 billion accounting charge for excess inventory? (See Cisco's Q3: Ouch!.) That was the quarter in which the company wrote off the value of all sorts of old components it thought it would never use. Where all those unused components went, we’ll never know. Did they end up in holiday fruit cakes?

It’s hard to remember, but for a while Cisco was losing boatloads of cash and its revenues were declining. But now it’s doing what it’s known for: growing (though modestly), and generating piles of the green stuff. The company’s logged more than $1 billion in operating profits in the last four quarters. A return to profitability was an important milestone for the World’s Most Powerful Networking Company. Now CEO John Chambers has a plan to attack several new billion-dollar markets, including security, wireless LANs, and next-generation optical gear. The migration by carriers to packetized voice and converged IP backbones is playing right into its hands.

No doubt about it, Cisco is back, and it’s positioned as well as anybody for 2004.

— R. Scott Raynovich, US Editor, Light Reading