A Simple View by JACK RUNFOLA To add my thoughts to others, these last few years in the submarine system market have been pretty bad. Actually, it has been damn ugly. Many new entrants have disappeared, which is old news, as well as some old-line companies who have been forced into financial positions one would never have imagined. Unfortunately, this is still an ongoing event. So, what does it all mean? Business is bad and hundreds of thousands of people are out of work worldwide. Not good. Or is there some good, albeit limited, after all?
Each of us has our own opinion, and my opinion is straightforward. The telecoms industry has made the same overbuild mistakes as the oil companies in the 1980’s, as well as steel, automotive, defense and many other industries. No one ever seems to plan for a bust. But sure enough, a downturn always occurs. This is the force of nature, market nature, and as an old American television commercial said, “You don’t fool with Mother Nature.” Well we did, and some gained financially in the short term, while the consumer gained from new technologies and better pricing for services. 13
I have long felt that the long haul market was slightly overrated. Building to span and connect the continents so that Internet, data and voice may be exchanged, to where redundancy already existed, and to where one is not sure why it needed to be there in the first place, seemed to be the goal. What a goal! Frankly, I have never heard an analyst say, “We got it wrong”. Maybe they have, but I wasn’t there to hear it. The objective being achieved, the consumer benefited from lower prices while increasing instability. Like Lady Justice, the consumer and supplier were blind. Not all efforts end in failure, or Chapter 11. Apollo, Southern Cross, Australia Japan, Japan-US, and many other systems have survived. Why? Simply put, these systems were backed and utilized by major carriers and operators who already had a customer base. No doubt each of these systems have had to face the impact of the downturn, but they are still active and very much alive. What I find interesting is that they are able to maintain their respective operations without having the benefit of court approved restructure, which allows debt to be made just about non-existent. Looks like these systems, as an example, have some pretty good management and teamwork. To me, this little fact is very impressive. The telephone industry is pretty uncomplicated to describe, albeit complex to run. A carrier/operator collects revenue all week