2008 Year in Review: Telecom nuclear winter, Take 2

Snow is swirling around the FierceTelecom Chicago outpost as I write this. The dog is curled up in a ball to stave off a draft coming from... somewhere. The temperature is dropping. Visions of sugar plums, but also, unfortunately, of telecom nuclear winters, are dancing in my head.

Telecom economic metrics remained reasonably robust for most of the year while other industries were crashing. For the most part, company executives around the telecom world put on a happy face as the quarters progressed, though by the third quarter, many of them were put in the position of celebrating still-solid numbers, while being sure not to be too celebratory. Fourth quarter numbers, of course, will not become clear for a few weeks, but it did become clear early in Q4 that the industry's mood had changed.

While the industry debated whether or not TelcoTV services are recession-proof, telcos and their vendors began to cut back on most other fronts. AT&T announced major job cuts, as did Telecom Italia and BT, among others. Verizon Communications and Qwest Communications have taken their turn cutting back, and numerous vendors announced layoffs and other moves as capex forecasts dwindled. For most of 2008, the economy was a major story, because bad times weren't hitting the industry hard, but as the year closes, it's becoming a bigger story because the downturn has reached us. The snow drifts are piling up, and it's getting colder.

Of course, the "nuclear winter" is the part that comes after the big explosion, so to be clear: While 2008 got dicey near the end, we may have yet to experience the worst that the downturn will offer.

Related articles
Third quarter earnings raised thoughts of economic downturn
AT&T announced 12,000 job cuts and 2009 capex cuts
BT plans to have cut 10,000 jobs by next year
Telecom Italia will cuts 4,000 more jobs
UBS recently predicted 10 percent capex decline next year