Threats as Well as Opportunities Abound for the Telecom Industry in an Uncertain...

Threats as Well as Opportunities Abound for the Telecom Industry in an Uncertain Economic Future

The Planning Process is Critical
PALO ALTO, Calif.--(Business Wire)--
The telecommunications industry must plan its strategic responses
to multiple economic scenarios. Without adequate forethought on the
spiraling ramifications of economic downturns and diligence in
detecting which scenario is upon them, telecom management teams will
find their options for effective course correction greatly
constrained. Worse, some firms may fail or be forced into being
acquired at distressed prices.

Senior Research Analyst Pete Dailey of Stratecast (a Division of
Frost & Sullivan) identifies and analyzes three different recession
scenarios and relevant strategies in his recently released insight,
Navigating Turbulent Economic Waters with a Scenario-based Strategy
Process.

If you are interested in receiving a copy of Navigating Turbulent
Economic Waters with a Scenario-based Strategy Process, then send an
e-mail to Mireya Castilla, Corporate Communications, at
mireya.castilla@frost.com with the following information: your full
name, company name, title, telephone number, company e-mail address,
company website, city, state and country. Upon receipt of the above
information, the insight will be sent to you by e-mail.

"Ask two economists what the economy will do in the near future,
and you will get three opinions -- or more," says Dailey.

As the future economic reality unfolds, companies may face one of
three scenarios: a deep, long-lasting recession; a deep, short-lived
recession; or a shallow, short-lived recession.

"The characteristics of the deep, long-lasting recession scenario
are elevated unemployment and massive contraction in consumer
spending," says Dailey. "This results in reduced enterprise spending,
a broad-based contraction of gross domestic product (GDP), and may be
accompanied by inflation."

Additionally, a deep, long-lasting recession would almost
certainly entail a protracted erosion of real estate values, continued
weakening of the dollar and sustained increases in oil prices. In this
scenario, telecommunications services, as well as consumer
electronics, enterprise information technology, the media and
entertainment sectors, would all see a decline.

This valuable new research from Stratecast not only characterizes
the deep, long-lasting recession scenario, and appropriate strategies
to deal with that scenario, but similarly assesses the deep,
short-lived recession scenario, and the shallow, short-lived recession
scenario.

Any of these recession scenarios will impact the performance of
players in the telecommunications industry. A deep, long-lasting
recession would almost certainly result in a degree of industry
consolidation, with the most vulnerable firms collapsing, and still
others acquired at fire-sale prices.

"Stratecast recommends that all clients, service providers and
vendors alike devote increased resources to monitoring and analyzing
the economy," says Dailey. "Utilize a scenario-based strategy
development process that formulates and models actions in response to
various hypothetical situations."

For instance, firms may consider overseas expansion as one way to
turn the decline of the dollar into an opportunity. Changing fiscal
controls, by accelerating asset turnover, restructuring liabilities
into longer-term instruments and converting assets to
currency-adjusted securities, is also a method that will insulate
against the deleterious effects of recession.

Likewise, firms should focus resources on relatively
well-performing sectors of the economy, like the agricultural,
hospitality, and oil and gas sectors. Stratecast offers critical
insight into pricing strategy tailored to meet varying objectives.

Stratecast contends that trends such as wireless replacement of
wireline services, migration to voice over internet protocols, the
shift to digital media delivery and increased Internet video
consumption are likely to be amplified by economic pressures.

"Every economic scenario involves threats as well as
opportunities," notes Dailey. "Some industry participants will stick
their heads in the sand and pretend that the economy will be static
and possibly miss opportunities. A proper scenario-based strategy
process involves constant calibration."

Stratecast assists clients in achieving their objectives by
providing critical, objective and accurate strategic insight, in a
variety of forms, via an access-and-industry-expertise-based strategic
intelligence solution. Stratecast's product line includes: Monthly
Analysis Services (Convergence Strategies & Network Architectures
(CSNA), OSS Competitive Strategies (OSSCS), Network Professional
Services Strategies (NPSS), Consumer Market Strategies (CMS), and
Business Market Strategies (BMS)); Weekly Analysis Service (Stratecast
Perspectives and Insight for Executives (SPIE)), Standalone Research,
and Business Strategy Consulting.

Frost & Sullivan, the Global Growth Consulting Company, partners
with clients to accelerate their growth. The company's Growth
Partnership Services, Growth Consulting and Career Best Practices
empower clients to create a growth-focused culture that generates,
evaluates and implements effective growth strategies. Frost & Sullivan
employs over 45 years of experience in partnering with Global 1000
companies, emerging businesses and the investment community from more
than 30 offices on six continents. For more information about Frost &
Sullivan's Growth Partnerships, visit http://www.frost.com.

Frost & Sullivan
North American Corporate Communications
Information & Communications Technologies
Mireya Castilla, 210-247-3830
Fax: 210-348-1003
mireya.castilla@frost.com
http://www.frost.com

Copyright Business Wire 2008