the state of telecoms

Filed in archive Global Economy on October 1, 2004

Om Malik has a gloomy status report about telecoms:

"The buzz around VoIP, fiber to the home, wireless, WiMAX and all sorts of cool technologies would make you believe that we are seeing some sort of a telecom rebound. I call this Chimera, a mirage and nothing but a pause between the continued downward spiral. Today, three bits of news caught my eye and they all portend to harder times ahead. Both Lucent and Nortel, are continuing to cut headcount, shipping them offshore, or simply giving their employees a pink slip. "The company is moving all development to India - no ifs, ands, or buts," a senior Lucent employee told Light Reading. "We're starting to drop like flies." Morgan Keegan & Company Inc. analyst Simon Leopold estimates that another 3,250 jobs, pushing Lucent's global headcount below 30,000, first for the erstwhile telecom leader. Lucent's former corporate parent AT&T continues to shed jobs like an old dog shedding fleas. Nortel says it is going to slash another 3200 jobs. Elsewhere, Wired Online reports that the bandwidth glut lives on, and cites a Telegeography report, when it reports that "the average prices paid for access to fiber-optic networks connecting European cities and linking U.S. cities have fallen 49 percent and 55 percent respectively."