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2005 Top Ten: Signs of Recovery

Phil Harvey
12/29/2005

The telecom industry in 2005 was like John Locke, the character that actor Terry O'Quinn plays on Lost. Like Locke, the telecom industry survived a horrible crash and somehow emerged able to wiggle its feet, stand, and, yes, even to walk again.

But how long will the telecom industry stay upright? How long before another episode of fear, panic, and depression sends it back to bed where it shares its aspirations with phone sex operators until the wee hours of the morning?

Well, we're sure as heck not going to answer that. But we will give you ten big reasons why we think the telecom industry is more likely to be walking around a while, and maybe even running, in 2006.

10. The Leading Lights Are Still Going Wild
We said it last year and it's worth repeating: So long as the industry has a vibrant awards program -- like Light Reading's Leading Lights -- there will continue to be a reason to focus on the success and growth stories and those making champagne from the telecom industry's lemons, even while that sounds scientifically impossible.

  • One last time, here's our Leading Lights highlights:




9. There's an Acronym Explosion (AE) Going On
Thanks to the emergence of IPTV, IMS, and several other next-generation communications technologies, 2005 saw a precipitous rise in the use of industry jargon, shorthand, and ridiculous acronyms. (See LR Explains IMS.) Even Newton's Telecom Dictionary is getting so big it should come with a spotter. This year saw the 21st edition of that venerable volume, which is now 990 pages and contains more than 22,400 terms. By comparison, the version on my desk, the 14th edition, has 882 pages and includes 15,810 terms. FYI -- IMHO, that's a lot of words. LOL!

8. You Still Can't Spell IPO Without "IP"
Lots of companies were making noise about going public in 2005. Seriously, LOTS of companies. (See Sylantro Ready to Garnish Public Markets, Fortinet Fires Up for IPO, Fiberxon Mulls IPO, IPTV Operator Plans London IPO, Ubiquity Plans London IPO, Profitable Passave Pushes for IPO, Sources: Vonage Is Eyeing the Exits, and Europeans Eye IPOs.)

Comparatively, very few telecom companies went public, which tells us there may be some pent up demand, as they say in financial circles. But the ones that did -- and the ones that did well -- had a solid story built around the evolving world of services that will run on IP networks (See NeuStar Twinkles on Wall Street, Rural Carrier Makes IPO Hay, and Cisco-Backed Cbeyond Sees $73M.)

7. CMP Paid $27M for a Telecom Website
We're still pinching ourselves. And CMP is pinching us, too. They're a handsy lot.

Seriously, Light Reading's acquisition says a lot about the new CMP Media LLC and the telecom industry overall. CMP today is definitely a company that's serious about covering the convergence of telecom and enterprise networks in new and interesting ways. And that's where we come in. Heaven knows, if the telecom industry were headed off another cliff, we seriously doubt a five year-old online media company would be able to get a Costco card, let alone a benevolent corporate parent. And can you imagine how an innovative product like LRTV would look if we didn't have proper financing, oodles of talent, and a healthy dose of humor? [Ed. note: Probably like this.]

6. Ethernet Becomes THE Show
When hundreds of service providers turned up at a first year event in New York called Light Reading's Ethernet Expo, it says a lot about where the telecom space is headed. (See Light Reading's Ethernet Expo: Day One, Light Reading's Ethernet Expo: Day Two, and Light Reading's Ethernet Expo: Day Three.) When carriers of all sizes and geographies embrace a technology that forces them to evolve their networks, that's a good sign that the industry is getting healthier. And we're pretty sure if the show was called the Legacy Sonet and Class 5 Switch Expo, and if it were held it in Scranton, Pennsylvania, the turnout might not have been so stunning.

5. There's a Party at the Premises
One thing that became obvious in 2005 is that network equipment vendors of all shapes and sizes decided that they needed to own the last device in the last mile if they want to increase their chances of survival in a world where service creation reigns supreme. Cisco Systems Inc. (Nasdaq: CSCO) bought a set-top box vendor, Siemens AG (NYSE: SI; Frankfurt: SIE) and Entrisphere Inc. started making their own optical network terminals (ONTs), Calix Inc. (NYSE: CALX) bought itself some GPON insurance, and, in the enterprise, the concept of Ethernet demarcation spawned several new products and one notable acquisition. (See Cisco to Acquire Scientific-Atlanta, Siemens Enters BPON Business, Entrisphere Intros Gear, Gets Grande, Calix to Buy OSI, and ADVA Snaps Up Covaro.) The activity at the customer premises suggests that the services we've been hearing about for eons -- IPTV, wireless everything, fiber-fed access, etc. -- are, as ever, just around the corner.

4. Lucent Dons a New Look
Lucent Technologies Inc. (NYSE: LU) used to be the poster child for how the telecom industry had fallen. In 2005 though, Lucent was more competitive, more interesting, and it talked a completely different game than that of just survival. (See Pat Russo, Lucent Technologies, Lucent Lands BellSouth IMS Deal, SBC Jumps on Lucent IMS Bandwagon and Cingular Picks Lucent for IMS.) Not only was Lucent successful in grabbing the industry's attention with its IMS message, it was also the unlikely star of a Light Reading awards show. Sure, stranger things have happened. But we're hard-pressed to come up with one right now.

3. Supercomm Splits in Two (sort of)
You know the industry's fortunes are looking up when the two largest telecom-related trade groups felt like there was enough marketing money lying around that they could put Supercomm to rest and go off to managing their own mega-shows. (See TIA, USTA Split on Supercomm.) In June, we bid a fond farewell to Supercomm and to the United States Telecom Association's TELECOM conference series. And, in 2006, we'll welcome the USTA's TelecomNEXT and the Telecommunications Industry Association (TIA)'s Globalcomm show. (See Globalcomm Wins 'Show Wars' Poll.) While early polling suggests that the TIA's effort might garner more first-year support than its competitor, the reality is that both shows have confidence that the industry is stable enough to make room (and money) for two.

2. Corporate Comedy is Back
Remember the days when you could get your boss to appear in a corporate video singing about his company's success and you could put him in with jiggly dancing girls; a soccer team; and a couple of puppets for comic relief? Well happy days are here again as evidenced by the Light Reading's 2005 Corporate Video -- a near waste of time, money, and bandwidth that simply wouldn't be possible if the industry were still taking it in the shorts. Sure, it's not an iron-clad economic indicator, but it is proof that things aren't as dreary as they used to be.

1. Juniper Goes After the "Does"
Seriously, is there any better sign that all is well with the business than when a company can take the time to obsess on what a handful of random, anonymous people on the Internet are saying? We think not. (See Juniper Sues LR Message Boarders.) So Juniper's decision to sue Light Reading's message board users has to be taken as a sign that things are going so well for the router maker -- and maybe the telecom industry as a whole -- that there simply are no bigger fish to fry at the moment. Which is too bad, if you like fried fish. (See Juniper Complaint and Poll to Juniper: Bad Move.)

* * *
So, what have we learned? This Locke-like industry, though sometimes creepy, is still in a much better place than it was a few years ago. And the wheelchair can stay stowed for now. The telecom industry is firmly on its feet and looks to stay nimble for a while. But, like Lost, the telecom industry is also full of unexpected twists and surprises. So stay tuned for next year's list: Top Ten Reasons the Telecom Industry Was Unexpectedly Eaten by a Giant Polar Bear.

— The Staff, Light Reading

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inauniversefarfaraway
inauniversefarfaraway
12/5/2012 | 4:10:29 AM
re: 2005 Top Ten: Signs of Recovery
Hey Phil,

Profitable acquisitions? Funny how most analysts still refer to it as 'consolidation'. IPO's? You mean the train wreck that is Wall st? All your favorite stocks now going into their 5th year of stagnation.

Whiners are the folks who allow LR to pay the bills. In fact, whiners are the reason organizations change. Communists had a great approach to whiners, and look at what a great success that turned out to be.

Do you have the demotivational in your office that reads: The firings will continue until morale improves.

Capitalistm is all about whining, dude.

Check out the Matrix series of movies, the part about the initial matrix being blissful, and the ensuing disaster.
o-man
o-man
12/5/2012 | 4:10:29 AM
re: 2005 Top Ten: Signs of Recovery
Straight Shooter-

I wish all who invests in telecom great luck in 06!!!

I do truely feel things are a lot better than the economists are talking aboutin this sector!

DCITDave
DCITDave
12/5/2012 | 4:10:28 AM
re: 2005 Top Ten: Signs of Recovery
re: "Do you have the demotivational in your office that reads: The firings will continue until morale improves."

How dare you! No, my cube has the poster of the kitten swinging from a tree branch. It says: "Hang in there." Gosh it's cute.

ph

o-man
o-man
12/5/2012 | 4:10:26 AM
re: 2005 Top Ten: Signs of Recovery
ph-

you forgot to mention the gigantic alligator snapping at the bottom of the kitten...
straight shooter
straight shooter
12/5/2012 | 2:47:47 AM
re: 2005 Top Ten: Signs of Recovery
What! How can this be real journalism when half the references are self-serving?

This list shows that the telecom industry is in serious trouble--far worse than I could have imagined when I left it two years ago (after 25 years) to run my own company...
DCITDave
DCITDave
12/5/2012 | 2:47:45 AM
re: 2005 Top Ten: Signs of Recovery
You might be taking our goofy list a bit too seriously.

If the industry were in the dumps, none of the above referenced stuff -- profitable acquisitions, IPOs, trade show expansion, etc. -- would be possible. Self-serving or not, facts is facts.

To your point, a lot of the whiners have left the business and that's good, too.

ph
o-man
o-man
12/5/2012 | 2:47:44 AM
re: 2005 Top Ten: Signs of Recovery
straight shooter...

You bailed on this industry, but you still read articles like this... WTF-man. If your busy trying to build a business I suggest you stay focused or you will fail!

This industry has turned up hard in the last 6 months!! You might be truing to justify your quiting?
DCITDave
DCITDave
12/5/2012 | 2:47:43 AM
re: 2005 Top Ten: Signs of Recovery
Who says he quit?
o-man
o-man
12/5/2012 | 2:47:41 AM
re: 2005 Top Ten: Signs of Recovery
just a wild guess and he left the industry!
straight shooter
straight shooter
12/5/2012 | 2:47:32 AM
re: 2005 Top Ten: Signs of Recovery
O-man,

Point taken... BUT profits from telecom gave me the freedom to purchase my own business (and yes, per other posting suppositions, it is in a different industry altogether). Still, I have investments in telecom and a person needs to keep a pulse on their investments even if it only takes a few minutes each week. And of course, if you run your business right (and don't have to fly halfway around the world each week as I was doing as a VP), you have ample time to attend to other important things like your portfolio, family, friends, etc.

-Straight Shooter
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