2009 Year in review: Telecom trials and tribulations
Even after conducting various top five and top ten lists for other publications, including other topics right here at FierceTelecom, it's never easy to synthesize a top five list of the best stories in the wireline telecom segment.
But as we publish our last edition of FierceTelecom for 2009, I still think it's a great time to look back and reflect on the year. As I see it, the wireline telecom industry in 2009 was a time of transition and overall uncertainty for not only service providers, but also the vendor community who--dedicated to near-term results--get hurt when carriers put projects on hold.
For wireline carriers, the challenges are no less daunting. And even if Verizon's CEO Ivan Seidenberg says he's no longer worried about landline loss and will replace it with more emphasis on fiber and video, it's hard not to notice that cable is happy to find ways to take residential and even business revenue away.
With all of these challenges as a backdrop, I think that there were at least four news angles that stuck out under the umbrella theme of trials and tribulations in 2009:
- The vendor struggle: Beset with a sagging economy, wireline carriers took a relatively conservative approach to capex spending in 2009. One vendor that continued to falter because of the slower spending and maybe a lack of focus was Nokia Siemens Networks (NSN). While its services business continues to fare well--a growing theme amongst telecom vendors--sagging sales drove the company to not only to replace its CEO, but restructure the company and announce a major round of layoffs.
- Telecom tragedies: While the process is far from complete, I would place two events in this category: Nortel's ongoing asset liquidation sale and FairPoint's bankruptcy. Once a dominant force in the wireline and wireless industries, Nortel's former CEO Mike Zafirovski decided that instead of righting the ship, why not just sell the ship? FairPoint's slide into bankruptcy not only proves how hard it is to integrate new operations into your own fold, but it was also a big loss for New England customers that depend on the company for service.
- Tier 2s bulk up: After Verizon and the legacy SBC bought out MCI and the old AT&T in 2005, many thought it would only be a matter of time before the tier 2 market started to consolidate, right? Well, actually, the consolidation did not really start taking off until late last year when CenturyTel moved to acquire EMBARQ and now its two counterparts Frontier and Windstream are following suit by making their own purchases.
- Stimulating broadband: In 2009, the new presidential administration not only ushered in a new attitude of transparency, but it also set aside $7.2 billion to help fund last mile, middle mile and municipal broadband projects under the ARRA (American Recovery and Reinvestment Act). On the surface, the idea is promising, but honestly will it really be enough to make a big impact on bridging the broadband haves and broadband have nots?
Okay, so there you have it. That's my list and I am sticking to it. You may notice that this special issue will be our final issue for the year as the FierceTelecom and FierceMarkets crew is taking a break to practice their Christmas caroling and cookie baking skills. Have a great holiday and check back in with us on January 4 to see my top five predictions for 2010.