re: Capex Watch: Expect Shrinkage in 2009Projects are generally not funded through revenue, they are usually funded through short term loans that are paid off from the revenue stream. I cannot remember if it was the example was made up or real, but I remember something about ATT needing to borrow 4.5B for operations short term and they were having a very difficult time getting it.
The credit crisis seems to be worldwide, but none of the articles I read have mentioned Brazil, India, and Africa. China seems to be reacting more to global pressure than to a need to do something.
re: Capex Watch: Expect Shrinkage in 2009I can't name one sizeable carrier that doesn't have a ton of debt; please correct me tho.
I am sure there isn't one, but remember, they are supposed to have debt. These are large companies with significant PP&E and reasonably stable cash flows. They should be financed with a signficant debt component. The big difference from 2002 is that you don't have a lot of speculative start up firms that are extremely debt laden. They were all washed out in the last cycle.
re: Capex Watch: Expect Shrinkage in 2009I am sure there isn't one, but remember, they are supposed to have debt. ... These are large companies with significant PP&E and reasonably stable cash flows.
Here's the thing: We are about to find out just how "stable" the cash flows are. And that will tell us a lot about how much debt they are "supposed" to have.
The credit crisis seems to be worldwide, but none of the articles I read have mentioned Brazil, India, and Africa. China seems to be reacting more to global pressure than to a need to do something.