Carrier Spending Hopes Dim

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huntseat 12/4/2012 | 9:42:56 PM

re: Carrier Spending Hopes Dim "This trend in the wrong direction was anticipated last November by the Optical Oracle, Light Reading's subscription monthly research service.....The Optical Oracle will be revisiting the capex question this year in a report to be published for subscribers this November. "

So if only we were saavy enough to shell out exorbitant subscriber fees for Optical Oracle we would have known sooner that we are headed for the cliff. Maybe we should include these subscriber fees in the term sheet for the next round.

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scooby 12/4/2012 | 9:42:55 PM

re: Carrier Spending Hopes Dim Meanwhile the chattel here on the public site were reading stories about how Bell South was going to spend insane amounts of money on dozens of new RFPs.

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Scott Raynovich 12/4/2012 | 9:42:55 PM

re: Carrier Spending Hopes Dim >exorbitant subscriber fees

It costs $1,250 per year.

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Scott Raynovich 12/4/2012 | 9:42:54 PM

re: Carrier Spending Hopes Dim Scooby Doo, where are you?

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ahardie 12/4/2012 | 9:42:49 PM

re: Carrier Spending Hopes Dim Oh come on Scott. The guy has a point. You all ran that BellSouth article - completely missing the mark. Meanwhile at almost the exact same time your saying the Optical Oracle was showing a reduction in CapEx.

To have a premium service for clients is one thing - but Light Reading has the responsibility of what it runs for us "unwashed masses".

This is a nuclear winter we're in and your article on BellSouth showed poor judgement and was completely misguided.

Admit when you make a mistake - it makes your service better.

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nobollox 12/4/2012 | 9:42:49 PM

re: Carrier Spending Hopes Dim The point is, whatever the capex number is, is far below what every company thinks they have in sales through the next couple of years. If your gut feeling tells you that carriers are hiding their financials in general, what would make you think the capex figure would be any different.

Analysts want carriers to run lean (less capex), vendors want them to buy more equipment (more capex), and employees just want capex to spend so they have a job (any capex will do).

Summary - I still hear that aweful noise of the rollercoaster clicking

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hitekeng 12/4/2012 | 9:42:48 PM

re: Carrier Spending Hopes Dim I agree with "Ahardie"....
Also in the last few months, it has never been more obvious that CAPEX spending levels WILL NEVER come close again to the levels of pre-2000 boom years (at least for the next 3 years). Not in a market when you can now almost count surviving CLECs on your fingers. So with the ever-dwindling competition and the potential cut-throat price wars from bankrupt/restructuring providers (e.g. Yipes, Cambrian, Worldcom,...), ILECs are more inclined to keep milking their existing cows and preserve CAPEX/OPEX as much as possible (if it ain't broken, don't fix!! at least for the next couple of years...)
So I am not sure I would need Optical Oracle or Lehman Brothers to predict the direction of CAPEX spending. Just look around...(out is Optical/Telecom spending for now, in is military/security spending for the next few years...)

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Scott Raynovich 12/4/2012 | 9:42:46 PM

re: Carrier Spending Hopes Dim Boy you guys are tough. You know, I went back and read the article. There was a lot of good information in there, much of it still relevant.
You have to ask yourself, did the story subtract or add to collective knowledge of what was going on at the time.

http://www.lightreading.com/do...

I wouldn't hesitate to run it again. Do we know more today? Of course. Hindsight is 20/20. But the article did point out what we all know -- that promising RFPs can be quashed at any minute to save cash in this disturbing environment.

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BobbyMax 12/4/2012 | 9:42:45 PM

re: Carrier Spending Hopes Dim Major purchases ( e.g., Class 5 switches) are bought on a cyclical basis. Each product has its own life cycle. It is expected that Capex would decline through the year 2005.

Carriers are expecting next generation of SONET equipment that less expensive and have smaller footprint. Other technologies such as RPR are less likely take roots in the US.

It is primarily a lot of flip flops and and inability to speak truth has caused industry and the investors a lot of anguish.

RBOCs do not have infite capacity to change their transmission gear every year. Allmost all suppliers claim that their productsd are being tested by a carrier> Some of these carriers may not have 5-6 thousand lines.

Many analysts with no technology training provide a lot of misleading information to the shareholders. The escape clause for these so callled analysts is that such and such things were unexpected. It should come as no surprise that foreign investors have lost in the upwards of $8 Trillions forever. This is a form of economic terrorism the likes of which have not been seen in modern times.

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Kevin Mitchell 12/4/2012 | 9:42:42 PM

re: Carrier Spending Hopes Dim Just because overall capex is diminishing does NOT mean that there are no growth opportunities. Capex is also going to be shifted from legacy spends to new technology spends (not all at once, but in time). In June, BellSouth was talking a new MPLS network. That construction plan was comprised of multiple RFPs for optical gear and routers.

As for capex going forward, the steepest cuts in 2003 will be from the MSOs. The capex to revenue ratios for those companies is still too high (over 30%) and needs to get in line with the telcos (15-20%).

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