FNUSA Publishes Report on the $70 Billion Fiber Optic Mistake

(www.financialnewsusa.com) - Financial News USA is pleased to announce the publication of its new report on the $70 Billion Dollar Fiber Optic Mistake. It was just more than a year ago when investors were hearing about the insatiable demand for fiber optic networks. Fiber optic poster children like Global Crossing and Qwest may have gotten a jump on the competition initially, however small and large Voice Over Internet (VoIP) companies alike are using the built our fiber structures against the largest telecom companies as leverage to gain ground.

Next generation VoIP networks like Vectoria (OTCBB: VTOR) and Net2Phone (Nasdaq: NTOP) tap into into existing fiber infrastructure to offer long distance to its members with low or no charges. Essentially, the Vectoria network is an "Extended Local Telephone Calling Network". using sophisticated switching equipment and state-of-the-art gateways on thousands of miles of currently built out high speed fiber optic cable. Vectoria's state of the art Next Generation VoIP network enables customers to completely eliminate long distance charges.

According to Peter J. Howe at The Boston Globe, By tallying combined 1997-2002 capital spending by Baby Bells, long-distance carriers, and newer entrants to the market and comparing it to what he calls a rational level of spending to meet actual end-user demand for long-haul network capacity, Boston consultant Mark Bruneau came up with a gap of at least $70 billion between what was spent and what was warranted by growth in Internet, data, and phone traffic.

With Global Crossing (OTCBB: GBLXQ) bankrupt and several other long-haul optical network operators reeling, Bruneau, the chief executive of Adventis Corp., has followed up with a new study that places one of the first hard numbers on how much money has been wasted on needless telecom network expansions: $70 billion.

To put the $70 billion in context, the expenditure is four times what Verizon Communications (NYSE: VZ), the country's biggest phone company, spends to upgrade its network each year. The figure is also twice the combined annual revenues of Lucent Technologies and Nortel Networks, North America's biggest manufacturers of telecom and optical gear.

"A lot of this stuff will just rot in the ground," Bruneau said. "Even if there is a healthy growth in demand for bandwidth over the next decade, not disruptive or insane growth but neither anemic growth, you could conclude that [this fiber capacity] isn't going to get lit, isn't going to get used, and is going to be written off…there just isn't going to be a foreseeable need for a lot of this long-haul bandwidth." By the time some of the unlit fiber is needed many years from now, it could be technologically obsolete and have to be replaced, he said.

As of Friday 8 March, 2002, Qwest (NYSE: Q) had slid to $9.71, and WorldCom (Nasdaq: WCOM) to $9.19. Vendors serving the optical networking market including Lucent Technologies (NYSE: LU),Nortel Networks (NYSE: NT), Juniper (Nasdaq: JNPR), Ciena (Nasdaq: CIEN), Corning (NYSE:GLW), and Sycamore Networks (Nasdaq: SCMR) have seen comparable share plunges.