re: Carrier Spending Hopes DimI think your points are well taken. Let me expand on your thoughts with my points of view on the subject.
First - you had for the first time (between 1996 and 2000) an environment that created competition in the telecom sector. Well, that just boiled all the old-timers sitting around their board rooms full of cobwebs, cigars, and dust on their heads. In fact, just listen to the bells cry about how they can't control the market anymore.
Second - you had the combination of the internet boom with the 1996 telecom act and personal computer availability. This created a sense of investment opportunity, and, a serious influx of cash from ALL sides of equation. Investors, banks, venture capitalists, etc....all wanted to get into the game. Literally hundreds of carriers came out and said "hey, come with me, I have what you need for the future".
Third - all this excitment led to the lucents and nortels selling products like water from a tap. It was a time of experiments. Didnt matter if it worked, it only mattered that someone was willing to buy the products. Well, the new players on the block were loaded with cash, the old players loosened up their purses in fear of being left behind, and the vendors started drooling at the mouth in the hopes of making billions.
As a result of this combination of events, companies grew out of proportion, waste became the norm, telecom companies bought on future hopes rather than current needs, startups in the vendor field sprouted up like weeds in the hopes of making millions on stock options. And all the while VC's, banks, and investors were all pouring billions of dollars at anyone in the field.
Well, it exploded (or imploded as it were) and its coming back down to earth. Capex crunch? bull! There's no capex crunch. Its all coming back to a state of equilibrium. Its all coming back in line with demand in the real world. People make money on the way up by selling you crap, and people make money on the way down by selling you the disaster story. Contrary to "Gordon Gecko in Wall Street", greed is NOT good, greed does NOT clarify, and greed does NOT get to the essence of anything.
re: Carrier Spending Hopes DimNietzsche wrote: "In June, BellSouth was talking a new MPLS network. That construction plan was comprised of multiple RFPs for optical gear and routers."
---------------------------
What every happened to that BellSouth MPLS deal? I heard they were going with Cisco for the routers, but no formal announcements yet.
Another question people need to ask is, what percentage of total capex is for "maintenance" and what percentage is spent on new equipment?
re: Carrier Spending Hopes DimThird - all this excitment led to the lucents and nortels selling products like water from a tap. It was a time of experiments. Didnt matter if it worked, it only mattered that someone was willing to buy the products. Well, the new players on the block were loaded with cash, the old players loosened up their purses in fear of being left behind, and the vendors started drooling at the mouth in the hopes of making billions.
----------------------------------------
Fourth - A positive feedback effect was created when all the newly hired employees started pumping their 401K money back into the stock market.
Unfortunately, these people are now out of work AND out of their retirement money. The VCs lost paper gains but the workers lost the results of actual hard work and free overtime. Ah, the wonderful backside of the invisible hand. Stability vs. Response, folks.
re: Carrier Spending Hopes DimUnfortunately, these people are now out of work AND out of their retirement money. The VCs lost paper gains but the workers lost the results of actual hard work and free overtime. Ah, the wonderful backside of the invisible hand. Stability vs. Response, folks. ------------------------------------------------
VCs ALWAYS exit at the right time. What they lost in last two years is nothing compared to what they made from 1997-1999. Just ask wilecoyote.
You are right about 401k though. Have you read the book "The Great 401k Hoax" ?
a. Networking equipment, e.g., Routers, ATM switches, PSTN switches, SONET gear, Wireless gear, Sun Workstations for NMS, NMS software licences, etc.
b. Non-networking equiptment, e.g., new buildings, fiber plants, employee laptops, desks, chairs, tubelights, etc.
c. All of the above.
2. Can someone please breakdown the network related Capex numbers by technology (e.g., IP, ATM, PSTN, SONET, Wireless) for an RBOC (e.g., Verizon), an IXC (e.g., Sprint), and a wireless carrier (e.g., ATT Wireless)?
re: Carrier Spending Hopes Dimor how to run your company on greed and paranoia.
With '96, and the infusion of competition, the incumbents were in a total state of shock. Rather than trimming their internal fat built up over decades of monopoly, and thereby building a sustainable advantage (and company), they set off to crush or acquire competitors with all the logic, grace and dignity of demolition derby drivers. Cut rates! Burn cash! Give it away! Last man standing! Pump it up!
That same mentality went into planning their capacity ramps in LH. If it is built, buy it! If it even looks like it might be built sometime in the future, buy it!
Truth is: none will be left.
All the LH cars are smokin' wrecks. Move on. Rebuild in bankruptcy. Leverage it. Play the same game in wireless! Now the RBOCs are in the crossshairs. Chugga chug, beep beep! Crash!
When all the wireless cars are wrecked and rebuilt in bankruptcy they will use it to go play demolition derby in broadband.
First - you had for the first time (between 1996 and 2000) an environment that created competition in the telecom sector. Well, that just boiled all the old-timers sitting around their board rooms full of cobwebs, cigars, and dust on their heads. In fact, just listen to the bells cry about how they can't control the market anymore.
Second - you had the combination of the internet boom with the 1996 telecom act and personal computer availability. This created a sense of investment opportunity, and, a serious influx of cash from ALL sides of equation. Investors, banks, venture capitalists, etc....all wanted to get into the game. Literally hundreds of carriers came out and said "hey, come with me, I have what you need for the future".
Third - all this excitment led to the lucents and nortels selling products like water from a tap. It was a time of experiments. Didnt matter if it worked, it only mattered that someone was willing to buy the products. Well, the new players on the block were loaded with cash, the old players loosened up their purses in fear of being left behind, and the vendors started drooling at the mouth in the hopes of making billions.
As a result of this combination of events, companies grew out of proportion, waste became the norm, telecom companies bought on future hopes rather than current needs, startups in the vendor field sprouted up like weeds in the hopes of making millions on stock options. And all the while VC's, banks, and investors were all pouring billions of dollars at anyone in the field.
Well, it exploded (or imploded as it were) and its coming back down to earth. Capex crunch? bull! There's no capex crunch. Its all coming back to a state of equilibrium. Its all coming back in line with demand in the real world. People make money on the way up by selling you crap, and people make money on the way down by selling you the disaster story. Contrary to "Gordon Gecko in Wall Street", greed is NOT good, greed does NOT clarify, and greed does NOT get to the essence of anything.