Week In Research: Cisco benefits from content security spending; global telecom EBITDA falls behind revenue growth

Content security is king: Despite Cisco's overall lousy third quarter, the company saw a 30 percent increase in revenue for content security, says Infonetics Research, reflecting a continuing trend by companies of purchasing security services reactively--as well as to unload extra budgets as end of year approaches. Worldwide, the content security market grew 10 percent between the second and third quarters of 2010, reaching $715.2 million. Year over year, revenue in this segment is up 25 percent. News release.

Infonetics Cisco security

Capex bedevils the bottom line: It's sort of a "so what's new?" report, but a study from AlixPartners released on Thursday finds that service providers worldwide are still having trouble meeting capex needs--and it puts a figure on where telecommunications stands in a still-troubled global economy. Earnings growth is trailing revenue growth by 50 percent on average globally. Because EBITDA, which is a good indicator of a company's ability to generate operating cash, is falling behind, companies are continuing to put off capital investments. Meantime, other costs--sales and administration among them--continue to increase, putting operators in a precarious financial position. News release.

OTT is a double edged sword: Revenue for over the top (OTT) video services will exceed $20 billion by 2014, says a new forecast by MRG. This is good news for IPTV operators and online video providers, who can increase their OTT earnings "with no or low investment," the analyst firm says. But it's probably bad news for larger broadband providers, particularly telcos struggling to balance increasing demand for broadband services while maintaining older wireline services. The capex spending for broadband equipment to handle increased services will likely fall on their shoulders. News release.

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