fbpx

Long Distance – No. 9: Epilogue

When I said yesterday that there may be some further financial challenges ahead for the "traditional" telecommunications companies, I did not realize that on that same day AT&T Corp., the nation’s largest long-distance carrier, announced a plan to eliminate 7,000 jobs and write off $11.4 billion in assets. The Wall Street Journal reported that the company’s CFO had said "We’ve been doing a lot of streamlining to make the company more nimble and competitive". Many large companies have gone through these major down-sizing’s before — including IBM in the early to mid 1990’s. Usually, they are caused when management lose’s touch with markets, customers, and emerging technology trends. Unfortunately, many loyal employees lose their jobs as a result.
AT&T said it will eliminate a total of about 12,000 jobs this year. Even more unfortunate is the fact that if management in these situations does not act, and cut the staff and assets, the result is the company completely fails and all of the employees lose their job. In the case of telecommunications, it is not an industry that is going to go away. Quite to the contrary, more "bits" of data (zeroes and ones) will be traveling through communications networks than ever — continued growth as far into the future as anyone can see. It is the technology that is changing much more rapidly than "traditional" telecommunications companies planned for. Many of the bits will be digital representations of our voices (VoIP) as we talk using Skype and other choices from a whole new industry growing rapidly by integrating voice as data and with data. There will be more growth of bits through the air than through copper wires and more bits which are assembled into "packets" and using Internet technology as the way to move from point A to point B.
Tumultuous times are ahead for the telecommunications industry. There will be winners and losers. Users of the Internet, both consumer and business, will be huge beneficiaries as Internet technology races ahead.