Telecom rebound anyone?

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I am making an argument for a slow telecom comeback in my latest column in Business 2.0. Sure it is starting out slow, but the turnaround is finally beginning to take hold. (Read in PDF format.) In a chat earlier, Lynn Refer, CEO, of Oakbrook, IL-based Looking Glass Networks told me that his company is seeing a robust demand for lower speed circuits which carry data at speeds of between 100 and 1000 megabits per second. Despite higher competition, Refer says his company will get EBIDTA positive in 12 cities Looking Glass is currently selling its services. ÏAt lower speeds there is very little price erosion,Ó Refer added. Sevag Shenian, chief architect of Edison Carrier Services, a division of Southern California Edison said pretty much the same thing. He says that “the prices have remained steady for DS-3/OC-3 type services.” Clearly no one is looking for wavelength services, these guys said. Any additional comments, feedback and market stories are more than welcome.

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Sean Doherty

Om – we’re hearing that there’s some cautious optimism reflected in the wholesale fiber buying habits of carriers – esp in contract term. The dominant practice during 2002-3 was single year contract terms (or even month-to-month) …allowing the carrier-buyer to negotiate more favorable pricing at renewal time each year. Now, more than a handful of larger carriers are once again committing to 3-5 year contracts for new infrastructure requirements. The smart carriers seem now to prefer locking in a nice discount for multi-year terms rather than relying on future market price declines that may not appear.
I’d say the rebound has arrived…it’s just not evenly distributed (sorry WG).

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