Telecom show features long-lost sight: Optimism

ATLANTA - Perhaps it was news of equipment deployments and the promise of new services. Or the expectation of renewed network buildouts. Or hope that current regulations would soon be relaxed.

Whatever the reason, there was cautious optimism last week at the sparsely attended SuperComm 2003 telecom trade show. Show management set attendance at 24,000 - a 29% decline from last year - while the number of exhibitors was down 34%, and exhibition space was down 40%. Despite the grim figures, attendees were more upbeat this year than last, when the downcast mood at the show reflected uncertainty and anxiety about telecom's future.

"Last year there was definitely a for-whom-the-bell-tolls atmosphere," says Ron Westfall, an analyst at Current Analysis. "Now there is definitely more optimism because specific initiatives in specific areas have generated momentum. People believe there will be a mild recovery kicking in toward the end of the year."

And much of that enthusiasm had to do with evidence that carriers, which have cut capital spending in half or more over the past two years, are in a buying mood. Observers say that notion might carry over to corporations once they consider some of the new services that carrier spending will produce.

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ATLANTA - Perhaps it was news of equipment deployments and the promise of new services. Or the expectation of renewed network buildouts. Or hope that current regulations would soon be relaxed.

Whatever the reason, there was cautious optimism last week at the sparsely attended SuperComm 2003 telecom trade show. Show management set attendance at 24,000 - a 29% decline from last year - while the number of exhibitors was down 34%, and exhibition space was down 40%. Despite the grim figures, attendees were more upbeat this year than last, when the downcast mood at the show reflected uncertainty and anxiety about telecom's future.

"Last year there was definitely a for-whom-the-bell-tolls atmosphere," says Ron Westfall, an analyst at Current Analysis. "Now there is definitely more optimism because specific initiatives in specific areas have generated momentum. People believe there will be a mild recovery kicking in toward the end of the year."

And much of that enthusiasm had to do with evidence that carriers, which have cut capital spending in half or more over the past two years, are in a buying mood. Observers say that notion might carry over to corporations once they consider some of the new services that carrier spending will produce.

BellSouth announced it is purchasing next-generation SONET gear from Lucent and Cisco to support the delivery of Ethernet and other services to corporations. BellSouth also announced a four-year deal with Cisco to develop and market new managed service offerings for corporate customers.

MCI announced that Nortel will supply the infrastructure for its IP telephony service buildout.

And there was much buzz about the impending Fiber to the Premises (FTTP) RFP some expect to be issued next week by three regional Bell operating companies. FTTP is a specification agreed to by BellSouth, SBC and Verizon for access and provisioning equipment that will let them lay fiber to homes and businesses and offer a range of high-speed broadband services. Such services include PC backup, telecommuting, high-definition video conferencing and premises surveillance, interactive gaming and photo sharing.

"FTTP means a big change for the industry," says Paul Lacouture, president of Verizon Network Services. "The access side is fundamentally going to change the game. It's where the money is."

Broadband at center of recovery

Broadband access could be the gas that fuels industry recovery, SuperComm attendees said. It whets consumer and business appetites with enticing new services that drive revenue for service providers. On the back end, it prompts service providers to buy equipment from vendors to provision those new services; and vendors to buy components from suppliers to package into these provisioning systems.

FTTP is "positive, encouraging - a catalyst for the top line for service providers, their customers and their suppliers," said Pat Russo, chairman and CEO of Lucent, in her keynote address.

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It's also a catalyst for industry consolidation as large vendors look to ally with or snap up small makers of passive optical networking (PON) gear. A rumor swirling around SuperComm was that Lucent was sizing up PON vendor Quantum Bridge Communications.

Quantum Bridge would not comment on Lucent specifically, but said it is in discussion with several companies as a result of the FTTP RFP. Lucent says it does not comment on rumor or speculation.