The New York Times Web Calling Roils the Telecom World
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"After all, telecommunications and technology companies lost $7.6 billion in global market value from March 2000 to September 2002, as the industry was gripped by stunning collapses, financial scandals and an effort to absorb excess capacity on globe-spanning communications systems.

But alongside the industry's search for its direction after such turmoil are trends that threaten to destabilize global telecommunications further in 2003. These trends could be described as the start of a cannibalization of established services by disruptive new technologies."

redux [08.07.02]
Bob Frankston The Economist, the Internet, Telecom and the Dow

"Of course The Economist is not alone in this fundamental error but "Crash" story is a useful foil for addressing this misunderstanding.

It is a tragic misunderstanding since the woes of the Telecom industry are seen as representing the state of the economy rather than the collapsing of a facade of a Potemkin industry. In 1900's there was a real telecommunications industry just like in the 1800's when there was a thriving business in transporting ice from frozen lakes to warmer climes. Just as refrigeration put an end to the need for buying ice, the Internet has put an end to the need to buy telecommunications services from others. We just need commodity connectivity."

redux [07.22.02]
The Economist The great telecoms crash

"The telecoms bust is some ten times bigger than the better-known dotcom crash: the rise and fall of telecoms may indeed qualify as the largest bubble in history. Telecoms firms have run up total debts of around $1 trillion. And as if this were not enough, the industry has also disgraced itself by using fraudulent accounting tricks in an attempt to conceal the scale of the disaster."

"The danger is that the traumatic scale of the telecoms crisis will cause the pendulum to swing back too far in favour of the former monopolies. In the short term, they are likely to attract investment, to pick up the assets of bankrupt rivals, and to lead the way in consolidating the industry."

redux [06.18.02]
The New York Times Telecom Outlook: First the Bad News, Then the Bad News
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"The turmoil continues in telecommunications, making the long-awaited turnaround increasingly difficult to call. Indeed, in light of a wave of bad news last week and through the weekend, some analysts say the industry's problems could actually become worse before they become better."

" "I foresee a near total collapse as the endgame," said Susan Kalla, a senior telecommunications analyst at Friedman, Billings & Ramsey. "I've become more reactionary in the last month as it becomes clear that almost nothing is working in the industry's favor.""

redux [03.15.02]
MSNBC A telecom hangover ...that won't go away

"After nearly $2 trillion of investment, the build-out of the information superhighway has run out of gas. The mountain of money invested by wannabe global telecom providers continues to go up in smoke. Though the smaller upstarts were first to pull the plug, major carriers like Global Crossing are now hitting bankruptcy court. And analysts say it could be years before the industry shakes off its debt hangover, absorbs a glut of capacity and begins to grow again."

redux [02.08.02]
BusinessWeek The Tidal Wave Bearing Down on Telecom

""Some of the more highly leveraged companies are really struggling. They don't have the cash flow to make their payments," says James Glen, a telecom economist with Economy.com."

Worse, Baby Bells such as Verizon (VZ ) and SBC (SBC ) continue to eat away at consumer long-distance monopoly of AT&T, Sprint, and WorldCom. That's on top of the woes the big three already face in operating backbone undersea and land-based networks, which they resell to other operators in some places. While Sprint, WorldCom, and AT&T don't face the type of imminent cash crunch as Global Crossing does, a consolidation among even the major long-distance providers is now a possibility."

SMART Letter The Enronization of Telecom

"The fundamental health of the [telecom] sector is likely to get worse before it gets better . . . The combination of: the sector's anemic growth outlook, the cannibalizing competitive mega-trends of wireless substitution, voice to data migration, Bell entry into long distance combined with local competition, and the bubble-induced excesses in debt and over-capacity, all create a powerful wealth destroying dynamic. Telecom's 'debt spiral' has gotten so bad that even the relatively strongest players who are still able to raise significant capital (VZ, SBC, and BLS) don't want to assume any more liabilities or business risk. Consequently, Precursor is reversing its long held view that consolidation can help improve the sector from excess capacity and debt any time soon."

David Isenberg and David Weinberger The Paradox of the Best Network

"Despite the darkened outlook, new communications capabilities are within reach that will make the current Internet look like tin cans and string. The technical know-how exists. Radically simplified technologies can blast bits a million times faster than the current network at a millionth of the cost. These are sitting in laboratories undeveloped, in warehouses undeployed, and in the field underutilized.

It's not even that the communications revolution has been derailed by inept or self-aggrandizing behavior by incumbent telephone companies and their government regulators. Something more fundamental is at work."