Broadband's Growing 'Need for Speed'

BROADBAND'S GROWING 'NEED FOR SPEED'
[SOURCE: BusinessWeek, AUTHOR: Rachael King]
The prospect of a recession is not keeping AT&T -- or rivals, for that matter -- from pressing ahead with multibillion-dollar plans to install gear that will provide a raft of new television and high-speed Internet services to neighborhoods across the country. Economic slowdown or not, AT&T and its ilk are under pressure to provide ever faster Web access and TV products as they contend with cable companies such as Comcast encroaching on phone company turf with their own flavors of phone and Internet access. "Irrespective of a recession, there is a growing need for speed that is raising the stakes for broadband providers," says Craig Moffett, an analyst at Sanford C. Bernstein in New York. "I don't think there is much chance that the telcos will pull back on their network deployments. That ship has already sailed." During the telecom bust in the early part of the decade, communications service providers slashed budgets, trimming capital expenditures by 30% in 2002 alone. Analysts don't expect comparable reductions this time around, noting that competitive pressures make network upgrades essential. "The impact of that recession was as much related to technology over-investment, whereas now technology isn't the cause—it's being impacted," says Todd Rosenbluth, equity analyst at S&P.
http://www.businessweek.com/technology/content/jan2008/tc20080127_181692.htm?campaign_id=rss_tech