In big trouble:

AT&T - heavy debt. In the process of spliting up
Sprint - relatively okay
Worldcom - Chapter 11
Qwest - in big trouble
Level 3 - big pile of debt
Lucent - runnig out of cash and in credit crunch.

(those are just the huge ones in US. There are many many others in US and Europe. 200 telecom filed chapter 11 in 2001.)

Survivor:

Verizon - will survive. kicking ass in wireless
SBC - merged with baby bells to survive
BellSouth - kicking ass in DSL

Well, the reason this is significant is because our latest economic boom is a direct result of telecom reform act of 94. Thousands of startups formed over night. It simulated other sectors like IT industry, semiconductors, software, and even the old economy which all provided businesses to the booming telecom sector.

As the result of that, all the telecom carriers punched each other's face blue under intense competition. Now they all have boat loads of debt and bad credit ratings. I don't think they are even capable of taking us to 3G.

If you think the economy is bouncing back, don't count on it.

So now, what is next? Governmentize the telecom industry? I think that makes a lot of sense. This telecom calamity is very similar to the problems resulted from energy de-regulation in California. Some basic services should never have been privatized. In California the energy price quintapled because people have to pay for competiting infrastrutures. It doesn't make sense having multiple sets of redundant infrastrutures running around. Telecom de-regulation did some good things. Internet revolution would not have happened this quickly without telecom de-regulation. People still have to look for dates the old fashion way.(:D j/k) We would not have the big economic boom in the 90's. The problem is we might have mortaged our future growth because of that. The companies have taken on huge credit card bill and they will have to spend many many years to pay it off. Until they do so, the GPD and job growth will be sluggish and the next wave of technological revolution will be delayed.

Side Note: This is why I insist our economic woes have nothing to do with Bush.

I still believe that the telecom sector will stabilize. However, the worldcom accounting debacle doesn't help. I think worldcom will have to be sold piece by piece. If they allow worldcom chapter 11 it will actually hurt the other telecom companies.

The telecom industry is the key to turning the economy around. It has to stabilize and start seeing growth. I'm in telecom as are many of my friends and its been a rough year.

Originally posted by fadingCaptain
I still believe that the telecom sector will stabilize. However, the worldcom accounting debacle doesn't help. I think worldcom will have to be sold piece by piece. If they allow worldcom chapter 11 it will actually hurt the other telecom companies.

The telecom industry is the key to turning the economy around. It has to stabilize and start seeing growth. I'm in telecom as are many of my friends and its been a rough year.

Hey cool, what company do you work for? It doesn't seem like telecom is comming back any time in the near future. It might stabilize eventually but that doesn't mean it will grow. The market is saturated and there is no demand for new cool stuff like 3G or bluetooth.

I don't know how much impact will worldcom have if they collapse. I know my sector is waiting for Lucent to collapse so we can pick up their businesses, and besides, Lucent holds the key to the industry because they have more patents than anyone else. Some companies like to get some of the keys from them. If worldcom goes bankrupt I am sure other carriers will pick up their businesses.

If the economy is going to turn around, I suspect it needs to have the next wave for technological revolution. The 90's belongs to telecom and but I don't think telecom will lead the economic boom anymore. The next wave might be energy or biotech (people get old)

Telecoms as an industry arent dead yet. tech is moving too fast to permit a slowdown. The problem is too many providers... when a few die, and the survivors pick up the peices, it will stabilise..

I'm seeing this from an australian perspective mind you.

I am a telecom IT consultant and have been on many projects for various companies like sprint, primeco, etc. over the years...

Good point about lucent...only a matter of time before they go down. Companies are already scrambling for Worldcom business, though nobody cares about its large consumer customer base. No money to be made in long distance anymore.

Squid, I agree...too many people jumped in to get a piece of the pie. Look at all the CLECs that are gone now.