Spending has been down for at least a year, but there were some signs of recovery lately, with the, however unsteady, by the nation's largest phone companies. But Oren Shaffer, chief financial officer at Qwest Communications International, said last week that Qwest spent "significantly" less in the first quarter on capital improvements than expected. The company has also "yet to see an increase in demand for information technology and telecom services from our large business customers," he said.
Supercomm this year will be a more somber event than in years past, industry observers say. The convention begins Monday with Lucent Technologies Chief Executive Pat Russo's "pragmatic" address about how to recover from the three-year telecom tailspin. She'll suggest several new ideas that could spur a recovery, including improvements for the giant Ethernet networks that feed broadband, cable TV and telephone service to cities and counties.
Another economic salve to be suggested at Supercomm 2003 is an attempt to put the nation's networks of fiber-optic or copper wires to better use. The networks that crisscross the country do relatively little more than deliver TV, telephone and broadband services.
The will be demonstrating five services, including videoconferencing and online gaming, that could improve carriers' financial picture. The forum is backed by heavyweights Hewlett-Packard, Lucent, Nortel Networks and Sprint.
"Telecom is in a recession," said Will Walkoe, BCD Forum vice chairman and a Sprint employee. "But it's becoming more necessary than less."
Christine Martino, director of HP's carrier grade server business, expects to hear of more cost-cutting measures similar to the effort now under way at three of the four major phone providers. Last Thursday, BellSouth, SBC Communications and Verizon Communications said they'veof fiber-optic hardware and software, and do much of the legwork together, as they expand their networks. Martino said it's a cost-saving measure for both the carriers and equipment vendors.
"Carriers are moving away from proprietary systems developed in-house, because they don't have the research and development money any more," she said. "They are outsourcing. They are looking at common platform initiatives, looking at one platform and one operating system."
HP intends to introduce at Supercomm a new server that telephone or broadband providers use in their networks. The CC3310 is HP's hard charge at Sun Microsystems, which makes a competing product called, she said.
This year's show floor and its broad range of equipment, from Lucent's new refrigerator-size telephone network switches to U.S. Robotics' Wi-Fi PC cards, reflects another major effect of the spending cuts.
A decade ago, Supercomm was the nearly exclusive domain of telephone network equipment, said U.S. Robotics global product manager Kevin Goulet. This week, the show floor will be cluttered with home and office networking equipment from unexpected sources, all trying to find new ways of making money. For instance, U.S. Robotics is expected to announce at the show that it is selling, a relatively new arena for the company.
"Supercomm's getting even more diverse," Goulet said.
Not all of the tens of thousands of people expected to attend Supercomm are likely to be glum, although moroseness will be the prevailing mood, according to a smattering of interviews of expected attendees. Mark Straton, senior vice president of global marketing at phone and network equipment maker Siemens, believes acould end up spurring the industry.
Cable providers are now selling telephone services, spurring a move by telephone companies to head off potential damage by. That all takes new, faster equipment, much of which will be on display this week, Straton said.
"This could cycle into a tornado," said Straton. "I don't know if it will spin in 2003, but it will start. When we get to 2004, we could end up with the perfect storm."