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Telco meltdown brings good deals and major worries

Antony Adshead


It has been an annus horribilis for networks and telecoms providers, and their financial difficulties have presented both problems and opportunities for users.

The financial woes of network equipment providers have seen prices plummet, with suppliers keen to undercut each other in a shrinking, spendthrift market.

However, the poor fortunes of telcos have driven users to distraction as financial meltdown, staff cuts, poor internal morale and organisational dislocation have made suppliers difficult to deal with. The fear of network providers going out of business has made telecoms contingency planning vital for all users.

The telco meltdown kicked in over the summer with the WorldCom accounting scandal and KPNQwest filing for Chapter 11 bankruptcy protection. This raised the spectre of a breakdown of the very fabric of the Internet. Then, this month, Cable & Wireless announced massive job cuts and a £1.5bn hole in its cash reserves.

The shaky state of the telcos led the Communications Management Association to call for an "at-risk register" of suppliers, so users can monitor the health of suppliers.

On the broadband front, the Department of Trade & Industry announced the one millionth consumer broadband connection in 2002, but the technology has yet to be widely adopted by business.

The ultimate flop of the year has been third generation mobile services. The only firm which promised a UK rollout in 2002 was Hutchison, but its release date has now slipped to sometime during 2003.

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