Summary:

WSJ.com ::Welcome to the wasteland of telecommunications stocks. Massive debt loads, enormous overcapacity and stingy customers weigh on the group like a bushel of ten-ton trucks. Can this sector ever find its way back? Sifting through the book cookery of WorldCom, the investigations plaguing Qwest and […]

WSJ.com ::Welcome to the wasteland of telecommunications stocks. Massive debt loads, enormous overcapacity and stingy customers weigh on the group like a bushel of ten-ton trucks.
Can this sector ever find its way back? Sifting through the book cookery of WorldCom, the investigations plaguing Qwest and the demise of Global Crossing, one might as well ask: Who cares? But the fact is, investors should care. The global economy relies heavily on the transfer of data and information through communications technology, making it one of the core areas of capital investment. And right now capital spending remains the missing ingredient in the oft-discussed but still-elusive bull-market scenario. While capital spending could go to other things such as computers, its return to communications would signal that companies are once again confident enough to spend on the future. Telecom benefits when the communications infrastructure is growing. Like any battered group of stocks, telecom needs a leader to show the way out of the mess. AT&T, the much-ridiculed stock of the bubble era, could be the unlikely old horse that lifts telecom stocks out of the cellar.

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