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Optical/IP

The Effect of War on Telecom

As the world waits for the next step in the U.S.-Iraq standoff, international telecom experts ponder the effects a possible war would have on the sector.

The consensus appears to be this: The threat of a U.S. military conflict in Iraq certainly doesn't appear to be helping the situation.

The main threat to telecom is that investors are hesitating to make financial commitments because they don't know what the future holds. "Black-and-white situations investors can deal with. When things are grey, there's indecision," says Frank Dzubeck of Communications Network Architects (no Website). He says one banker told him he didn't care which way the situation went, so long as someone did something. A rather cynical view, surely, but one that may reflect frustrations in the financial community.

One researcher thinks the uncertainty and fear generated by war could significantly set back the slow progress of recovery in the telecom market. "Worldwide economic recovery would stall, already-reduced expectations would be dealt another jolt by war," says Lawrence Surtees, director of telecom and Internet research at IDC Canada. His firm has been modeling world disasters such as war threats into their forecasts since the September 11 attacks on the U.S. The worst-case scenarios are chilling, he says, particularly for equipment vendors.

"Investors ask, 'Do we want to make investments now, without knowing the outcome?' " says Steve Kamman of CIBC World Markets. But he urges against confusing the ennui of the telecom downturn with the war threat: "It could be a convenient excuse not to focus on what's going on in telecom, which has its own issues and problems... Take away the war situation and things wouldn't be much different."

One European analyst thinks the telecom market won't be as affected by a military action as other sectors. "We think of telecoms as utility-like services," says Bradley Bugg, analyst with Dresdner Kleinwort Wasserstein. While overall economic conditions have an impact, he says it's not as great as the impact on more cyclical segments, such as parts of the retail industry.

Still, analysts can't ignore the possible negative effects a war could bring. "The impact on the telecom market will not be telecom-sector specific," writes Jim Lawrence, program director at Stratecast Partners, in an email today. While stressing that his views are personal and don't reflect those of his employer, Lawrence doesn't pull his punches: "Everyone will be hurt by World War III and the coming global depression."

Some analysts question whether war would affect the ability of vendors to gain international telecom contracts. Would nations where governments influence telecom procurement use their influence against the U.S. or its allies? Would some European telecom equipment vendors, such as Alcatel SA (NYSE: ALA; Paris: CGEP:PA) and Siemens AG (NYSE: SI; Frankfurt: SIE), see North American contracts affected if their headquarters countries opposed U.S. action?

"Nothing in our research has ever indicated that purchasing decisions are based on nationalism," says Richard Webb, analyst of European networks and wireless LANs at Infonetics Research Inc.

Neither Alcatel nor Siemens will comment on the international situation; spokespeople from both say to do so would be dabbling in speculation.

War could also hinder upcoming tradeshows and conferences, however, where multinational attendees may face transportation hindrances and others simply opt to stay home.

Elizabeth Rogan, executive director of the Optical Society of America, says nothing short of a direct disruption at the conference site itself will stop the upcoming OFC Conference from happening.

"We believe the way to dispel the ignorance and fear of terrorism is not to respond to it," she says. Also, the OSA plays a big role in fighting terrorism, she says, by helping develop applications that can serve to protect against it and "dispel the fear terrorism tries to evoke."

Can anything positive emerge from the Iraq situation for the telecom sector?

Most analysts interviewed for this article don't see any positives emerging if war happens. In fact, even an increase in U.S. government contracts (see Dreams of the DISA Deal) are a response to terrorist threats, not to the prospect of war.

What do you think? Light Reading is currently running a Research Poll on War With Iraq. Weigh in with your views.

— Mary Jander, Senior Editor, Light Reading

For up-to-date information about the coming OFC Conference, please visit Light Reading’s Unauthorized OFC Preview Site.

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r00tless 12/5/2012 | 1:44:28 AM
re: The Effect of War on Telecom Okay, Rambo....Why don't you shut up and enlist?

Chicken?

Chickenhawk (noun.). A person enthusiastic about war, provided someone else fights it; particularly when that enthusiasm is undimmed by personal experience with war; most emphatically when that lack of experience came in spite of ample opportunity in that personGÇÖs youth.
h2o273kk9 12/5/2012 | 1:44:24 AM
re: The Effect of War on Telecom And just what would you have done during WWII? I guess the tens of millions of Americans, Canadians, Brits, Aussies, and others who supported the war effort but didn't volunteer must have been chickenhawks as well.

You're a swell person. Hiding behind name-calling rather than debating the merits of the war. If you oppose it, so be it. Say why? Stop acting childish and stamping your feet because you didn't get your way.
whyiswhy 12/5/2012 | 1:44:21 AM
re: The Effect of War on Telecom What, your post?

I presume that's what you mean because commenting on the war's effect on Telecom is very to-the-point, not boring, and (your post excepted) well considered.

Are you one of those neo-anarchist (aka: facist) Bush supporters?

I mean, let's look at the facts:

1) The administration facilitates offshoring jobs to prop-up the Chinese purchasing T-bonds so they can fight a war with deficit spending.
2) If the motivation was WMD, well, that's smoke and we all know it. We murdered 9 prisoners in our, made a mockery of the Geneva convention to say nothing of Christian moral values. And it has cost 780 US lives and over 10,000 Iraqi lives.
3) If the motivation was oil, well, the gas prices are higher now than they ever have been (thanks in no small part to China).
4) And if it was oil, where are the 55 MPH speed limit signs and gas rationing and 30-50 MPG requirements for Detroit?
5) And if it was to get rid of a "bad boy" why in the world would we give a damn? There are plenty of places much worse, and aren't doing anything. Saudi Arabia for one.

Bush: Stupid, incompetent, ignorant.

The goal of this war is to privatize Iraqi oil into US hands, and set up a facist dictatorship. Just like the AG is tring to do here at home with the "homeland" defence laws.

Homeland, homeland, uber alles!

-Why (Registered Republican)
h2o273kk9 12/5/2012 | 1:44:19 AM
re: The Effect of War on Telecom I happen to agree with you that it is not boring, pointless,and ill considered but that's as far as it goes.
Someone is not a fascist because they disagree with you. Another name-calling tactic designed to stifle debate. Grow up. You disagree with the war. Say so and state your reasons.
As far as WMDs go, you haven't been listening very carefully. The WMD programs remained in place as stated by David Kay and others. There have been recent finding of Sarin and mustard gas. There remained a myriad number of dual use facilities located in military installations and ammo dumps. What? Do you think they needed all that stuff for cockroaches? And only the Iraqi military had a pest infestation problem?
In addition, they violated the ballistic missile limitations.
As for the Geneva convention. Iraq was not a signatory. The terrorists do not follow the convention and therefore waive their right to its protections. The terrorists are not covered by it anyway because they do not wear a uniform and have no clear chain of identifiable command structure.
Still, the US attempts to be as humane as possible. Unfortunately, abuses do occur. Again,the US is investigating and attempting to rectify the situation.
If you think the US is so bad, have you followed what happened with Canadian soldiers in Somalia? I am also aware that UN peacekeeping missions are full of their abuse problems as well. Sex and otherwise.
Unfortunately, people seem to think that the US must be perfect or it is a failure whereas others can pretty will do as they please.
dljvjbsl 12/5/2012 | 1:44:18 AM
re: The Effect of War on Telecom Boring, Pointless and Full of Non Sequitors
flam 12/5/2012 | 1:44:17 AM
re: The Effect of War on Telecom Unfortunately, people seem to think that the US must be perfect or it is a failure whereas others can pretty will do as they please.

I think you have it backwards. Most people in the US seem to think that they can pretty much do as they please. Bill Maher has it right, when you drive your SUV alone, you drive with the terrorists. Or words to that effect.

Fact is, all armies commit murder and mayhem. That's what they are trained to do. Fact is, if you're on the winning side, you get to call it what you want. If you're on the losing side (i.e. the Nazis in WW2), the other guys get to call it genocide.

With the ease with which even moving images can be transmitted today, I think the bottomline is that NO ONE can be on the "winning" side any more ...



whyiswhy 12/5/2012 | 1:44:16 AM
re: The Effect of War on Telecom Someone is a facist if they fit the definition of facist. A facist is someone who believes in Capitalism without Democracy, period. The ultimate military-industrialist state. The rest like xenophobia or racism or anti-semitism is all technique to control the masses.

As to name calling, there is nothing wrong with it. Your web-handle is h2o273kk9. I would much rather use that than "the guy who is an appologist for fascism"...it's simply more efficient.

As to your comments: whether you recognize it or not, they go like this: murder is a fact of life, so it's OK to murder. I say, unborn babies die everyday, it's called being stillborn, so abortion is fine. That's your logic.

I think the better logic is: the thing that makes us diferent from a lot of the rest of the world is we at least try to be perfect. We have courts and Democracy, and they work, at least for now. Until more homeland security laws are passed.

The wrong-doers, will be punished, and not just the poor slobs at the bottom who took orders, but the arch-fascists Bush, Cheney, Rumsfield and Rice.

-Why
h2o273kk9 12/5/2012 | 1:44:10 AM
re: The Effect of War on Telecom >>With the ease with which even moving images can be transmitted today, I think the bottomline is that NO ONE can be on the "winning" side any more ...

Ah, cynicism with moral relativity. The heart of the matter. This is truly the reason for the deterioration of Western Civ. Bring on the dark ages. Part deux.

So if I drive an SUV (I don't by the way) I support the terrorists.
If you mean in spirit, you are just plain wrong and you know it.
If you mean because I fund them incidentally, well, possibly true. Now, if I drive a mini, then I still fund them but less so I must be less guilty. But still guilty. If I take a bus, it still uses the gas and oil so still guilty. I think virtually everyone on the planet is guilty. Is this what you mean?

We do live in an interconnected world. 6 degrees of separation and all that. I hope you can sleep tonight knowing you support the terrorists.
h2o273kk9 12/5/2012 | 1:44:09 AM
re: The Effect of War on Telecom Frankly Why, I couldn't follow much of what you wrote. Somehow it turned to babies and abortion. I missed the turn I guess.

As for fascism, I have heard no pronouncements by Bush, Ashcroft, Cheney, etc. that they were cancelling the election. So I guess they must still believe in democracy after all. Therefore, ipso facto...NOT FASCISTS

You dislike Bush and his policies. That's fair. I like some and not others. I have no problem with labels. Please try to correctly use them.
JoeBagadonuts 12/5/2012 | 1:44:08 AM
re: The Effect of War on Telecom "Why" calls himself a republican (more like RINO-- republican in name only) but if you read his positions and talking points they read pretty much in step with Moveon.org and other liberal groups.

I find it humerous that people make this Irag situation a fascist conspiracy (sort of like that Clinton Vast Right Wing Conspiracy thing) when your points were really the essence of the problem. The UN gave Iraq several opportunities to comply and never really did anything about it when Iraq didn't. We said we were going to do something about it and we did which came as a big surprise in many circles. Secondly, the whole "Blood for Oil" is pretty lame especially when you consider that the UN program was nothing but a blood for oil scam for France, Germany, Russia and people responsible for monitoring the problem. The price of oil is going up due to the fact that China is growing and its economy and sucking up resources, the dollar is weaker and since oil prices are tied to the dollar you get a higher cost. The oil speculators are also driving the market up. The ecology groups steadfastly refuse to go along with drilling in Alasks but we have a mish mash of gas requirements that make refining a real bitch. Meanwhile, too many people think that adjusted pre-70's gas prices are an entitlement. But of course, Bush and his oil buddies are to blame for the mess we are in. Kerry, on the other hand, points the finger at the current administration for oil prices but glosses over the fact that he's supported gas tax hikes in order to spur conservationism.

The Patriot Act was put in place to prevent other large scale terror attacks here and you know something? It seems to be working. Ask anyone who lost a loved one on 9/11 if they care about someone's supposed "rights" in light of their tragedy? It may not be perfect (as few things ever really are) but Americans demanded that its government do something and it has.
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