U.S. telecom pain is world’s gain

August 24th, 2004

By GadgetManiac

Interesting article by Jennifer L. Schenker over at the International Herald Tribune re the sorry state of the US telecom industry…

…”Billions of dollars worth of global telecommunications networks bought or built under U.S. direction and used to transport much of the world’s Internet traffic now belong to Chinese, Indian and other non-U.S. companies that snapped them up for a small fraction of their original cost less than four years after the telecom bubble burst.

“Some $30 billion in international telecom infrastructure owned by U.S. companies was sold to foreign-owned entities between 2000 and 2004 for a total of about $4 billion, according to Sam Paltridge, an economist at the Paris-based Organization for Economic Cooperation and Development.
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“Because it bankrolled these networks, “Wall Street has inadvertently financed more telecom infrastructure overseas than the World Bank and other international agencies,” Paltridge said.
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“The result is that carriers that sought in vain for years to be treated as equals by U.S. rivals for the first time can offer their own customers global end-to-end services, including access the biggest market – the United States – over their own facilities or through partners they are now in a better position to negotiate with.
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“Although U.S. carriers like Sprint, MCI, AT&T and Level 3 still carry a big percentage of the world’s Internet traffic, U.S. carriers have lost their status as unassailable global giants as more and more traffic is routed around them.
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“Other Asian carriers have suddenly become global or regional players by buying U.S. assets. In December, the government-controlled conglomerate Singapore Technologies paid $250 million to rescue U.S.-based Global Crossing, which filed for bankruptcy after spending more than $10 billion to build an extensive global fiber optic network that represents an estimated 20 percent of all undersea capacity leaving the United States.”…

My only comment is “Buy on bad news and sell on good news“. (Wallstreet proverb)

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