Happy New Year, really? A Telecom Industry Reality
By: Hysen Kuci
I’m not in the majority of people that start New Year’s resolutions and watch them fall by the way side a few weeks or months later. We do however have goals, projections for growth, and revise our yearly plans as any well managed telecom industry company does. In the ever changing telecom industry, and specifically the secondary equipment market many of us and our colleagues have become realists the past few years. The telecom industry is looking rather bleak these days, but will 2010 be a happier new year, really? Let’s recap the telecom industry last year for a moment shall we?
Telecom Industry 2009
Avaya/Lucent slashed jobs which might not be enough, Nortel’s inevitable bankruptcy and other telecom makers like Ciena complaining that AT&T is holding on to its cash and business will again be slow and growth non-existent this year.
Of course, everyone in the telecom industry who supplies hardware or services has been talking about this for some time. Budget restraints, employee layoffs, the credit crunch that hit everyone from large corporate America to the consumer; keeping phone companies (our customers) from borrowing money with which to spend on capital expenditures, such as upgrading their networks. Instead, the telecom industry has been focusing on paying off debt and maintaining the customers we already have. Consultants and data collection still show delays of 6-9 months in spending on projects including build outs at Verizon, AT&T and others. As a result, the credit crunch has also been a problem for telecom industry equipment suppliers like us here at aWorld Networks which send their gear to big-spending telecom giants. The problems extend to handset makers, too. Handset manufacturers are still suffering from lower demand in higher end devices and extended replacement cycles, even despite growth in emerging telecom industry markets, which in terms of wireless providers in the next few years, are where a good portion of where our gear is supposed to be used. Happy New Year!
Over the past few years, certain things in the telecom industry did come to fruition: Network connectivity has been ubiquitous around the world and in most cities in the U.S, Europe, China, India, and the Middle East, mainly via wireless. People have been online to such an extent that it has changed the very fabric of life. Ordinary people of all ages and demographics are going from being consumers to producers of media, with something as simple as a mobile phone. EBay, online banking, healthcare, finance, even social networking sites like Facebook where my teenage daughters can upload videos and produce media, to clicking on that next “thing” they need dad to buy. We are all connected, and it’s all related to the gear that we sell in one way or another. Moreover in the telecom industry, objects that a few years ago didn’t have processors now have them, and are linked to networks everywhere ordering medications, all sorts of shopping online, to keeping up with friends and family. Non human to non human communications have eventually superseded person to person communications. We see it every day in retrospect to the amount of calls we would normally get to the use of emails and instant messages, texts etc.
Telecom Industry 2010
We have seen new niches in the telecom industry though too, and most small companies need these to survive in any market or economic climate. The whole “everyone’s green thing” the past several years had created opportunities for many in the telecom industry, but then commodities fell off a cliff last year. Guess what? They are back in 2010 again, and some of those networks that were being ripped out and replaced have seen delays. The millions of dollars in the networks that man of us in the telecom industry support just can’t be replaced overnight now, not all at once, even though the demand for unified communications increases. Like most, we have seen way less homeruns and many more singles and doubles in the telecom industry through the downturn, and maybe, just maybe we are turning a corner in this market. Happier New Year?
I had been speaking with Robert LaPointe here at aWorld Networks through some changes we have seen as of late. Crazy enough, the last two quarters or so, much of the equipment we had been recycling for ourselves and others is coming back to life. Not everything, but some things. We use to say, as long as the makers are making new product there will always be a place for us. The definition of what that means has changed drastically in recent years though. As I write this piece, we were just made aware that Avaya-Nortel will not have a replacement for a part we actually sell a NT6X21AC line card. Well, what does that do for the hundreds of thousands installed around the world? If you’ve ever owned a classic car and needed a part for it, you my friend can answer that question. We have seen many of our Nortel replacement parts and such start increasing in value lately as the demand is there and the supply from the telecom industry well, isn’t. Can’t always go green when those delays continue yet the networks which we all support still need maintaining. Well, yes it is green, just a different sort.
Telecom Industry Future
Five years from now will it be a Happy New Year? This is an easy question to answer as I am certain that anything myself or anyone else tries to predict about the telecom industry will be wrong. I say this with confidence because if the preceding projections, future forecasts, build outs, shake outs, and fall outs of telecoms teach us anything, it is that we must approach the future of the telecom industry with humility. The best we can hope for is that there is a vibrant market. Maybe the next time my child sends me a text that says, “I need to buy something, see me on Face book”, I’ll remember that all these various types of communications which will soon be unified communication in one way or another, keeps us all employed here.
Happy New Year everybody.
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