2 thoughts on “McLeod to sell assets?”

  1. Four, yes four!!!, years ago I was making proposals and preparing investments based on the fact that ‘consolidation’ in the traditional (MBA blinders) way is not meaningful in the telecom space.

    Moore’s law and its ramifications are such that new technology innovations produce so much new performance (ie. mostly OVERCAPACITY), at ever lower costs, that consolidation done the old WS/M&A way is worst than pointless. In fact its a sucker play.

    (Just ask yourself how many wired local loop access lines are on the market without current bids!)

    Auto mfg’s, and other normal industries can consolidate because the rate of M&A absorbtion EXCEEDS the rate that new capabilities and capacity could ever enter the market. This point is CRITICAL.

    Thus the only real solution, and one which nobody on WS makes any money off of, is either individual corporate capitulation, or a race to the bottom for complete industry-wide segments.

    The only way to see sunshine in Telecom would be the arrival of really skilled marketers, but we all know there’s better odds on hell freezing over.

    JMVHO, Charlie Siera,
    future author of:
    ‘Circling the Drain: The predictiable meltdown of Telecom’

  2. Ok Charlie – I’ll bite: then where would you put your money in the telecom space? I’ve been looking at XO Communication in the downturn and I’m not impressed…Corvis looks the same….so what’s a good idea? Or, in the immortal (and paraphrased) words of the computer in “War Games” – perhaps the best idea is not to play at all?

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