World Trade Center events had little effect on telecom infrastructure

Oct. 4, 2001--Industry analyst firm RHK released a report summarizing the effects on the telecom industry by events of September 11.

By Mardi Balgochian Scalise, Lightwave Web Editor

Industry analyst firm RHK released a report summarizing the effects on the telecom industry by events of September 11. In general, RHK deems them �modest, with the most significant overall trend being one toward more conservative behavior, among all sectors of the market: finance, enterprise and individual end users, service providers and vendors.�

The report, September 11th, 2001: An RHK Perspective, centers mostly on the incidents in New York City with comments on short-term and localized effects, as well as general results and thought on how the industry will react if war or recession ensue.

According to the report, the impact on telecommunications is expected to be modest. Voice switches, cellular base stations, data networking equipment, and the power and facilities that supported them were lost, but �it seems most likely that the replacement of all the equipment would stay well below 1 percent of this year�s North American pubic network capex.�

RHK cited several areas where changes in behavior by individuals and businesses could ongoing impact on the U.S. telecom industry. Incumbent telcos are likely to wield financial stability. Along with this, North America will probably experience more conservative spending patterns, but spending will be focused on new broadband infrastructures due to a slow down in consumer spending and the weeding out of competition. Another factor is that many businesses may begin to take advantage of videoconferencing and other substitutes for face-to-face meetings. Business and private individuals have already shown more dependence on cellular phones since the tragedies of September 11, sending wireless service into increased traffic.

Lastly, RHK states that �disaster recovery is clearly one of the most important concerns now for many enterprises.� To this end, back-up and storage-area networks are getting more attention. With back-up and storage solutions comes an increased emphasis on the security and recovery of networks from physical damage.

RHK�s �September 11th, 2001: An RHK Perspective� goes on to show a detailed evaluation of the likelihood of specific impacts on telecom in both the short- and long-term, along with an explanation of how various governmental actions -- such as war, foreign aid and recession -- will affect telecom.

�Wars often have a positive effect on localized GDP; in this case, perhaps increased spending on high-performance communications and test gear,� states RHK. �Telecom has historically been noncyclic; even recent history in Japan shows a resilient telecom business.�

About RHK:

RHK is an industry market research and consulting firm specializing in the analysis of advanced technologies for the public telecommunications network. The company provides subscription services and custom consulting to technology vendors, service providers, component suppliers and the investment community. For more information, visit www.rhk.com.

More in Market Research