Mark Sebastyn 12/5/2012 | 3:28:12 PM
re: 2009: Brace for Impact Balsy call Craig. No doubt that the editorial integrity of Lightreading is intact.
rjmcmahon 12/5/2012 | 3:28:05 PM
re: 2009: Brace for Impact I'd agree with this analysis. It seems like the lessons from oil and OPEC in the 70s hasn't been learned by today's telco policy makers. Bandwidth is an enabler of productivity. The trick in the 70s was to convince OPEC that they could make more money on the productivity gains that came from oil abundance rather than pedantic adherence to the simpleton's model of extracting rents using artificial scarcity and distribution control of a base feedstock. Businesses (i.e. enterprises) don't tend to behave this way because, if they did, they couldn't compete. Instead most invest in their intellectual assets, which is, and has always been, the human himself. They do this by deploying modern bandwidth infrastructures.
paolo.franzoi 12/5/2012 | 3:28:05 PM
re: 2009: Brace for Impact

My take is that telecom equipment companies are struggling mightily. The exception seems to be companies that have significant Enterprise exposure.

If you look at the big players (Alcatel, Nortel, Ericsson, NSN, as examples), all of them are struggling in one way or another. Capex spending has shifted somewhat to "low cost geographies" and wireless. This means that on top of the pressures of customer consolidation, entry of large Chinese players, and the continued decline of the price per bit per second; that equipment vendors are under continuing profitability pressure.

Next up will be if the Enterprise customers slow their capex. If they do, then Juniper, Cisco, et al will see a slowdown in business.

HomerJ 12/5/2012 | 3:27:58 PM
re: 2009: Brace for Impact
speaking of a crash. anyone know what's going on with avago's ipo, and/or fire sale?
paolo.franzoi 12/5/2012 | 3:27:58 PM
re: 2009: Brace for Impact

I agree with you about this safety net. The move to rate cap and from rate of return means that the right capex number for any carrier is ZERO, unless that capex is directly related to new revenue or reduced cost. This is why cable has had to promise not to rebuild its infrastructure again. Investors want to get the low capex spending year profifts from the cable guys.

I am still baffled why service providers are spending billions to get into commodity residential services business and driving their costs up to do so.

Pete Baldwin 12/5/2012 | 3:27:58 PM
re: 2009: Brace for Impact 7: You're just not spending enough time talking to marketing people. :)

I do like your subject header there. What got me going on this was the continual hum about how telecom will have to slog on and keep building, even if the economic crisis lingers for a long time. So, I agree with you about the big players still struggling. I'm just not convinced of this safety net of forced carrier spending.

As for enterprise ... Cisco reports in about four hours. We'll see.
Pete Baldwin 12/5/2012 | 3:27:57 PM
re: 2009: Brace for Impact Cisco beat by 3 cents. Now we wait for any surprises in guidance.
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