It's Raining Shoes

Never mind waiting for the other shoe to drop. In telecom, shoes are falling from the sky at an alarming rate. On Monday morning Pinnacle Towers said it would file for bankruptcy. Telecom issues - especially WorldCom - were pummelled throughout the trading day on Wall Street. Monday night saw Williams Communications file Chapter 11. It's hard to imagine that MFN is far behind. Is there any good news out there? Well we found a couple bright spots.

Forbes this week profiled two providers who they think will be around for the long haul. In the wake of today's improved earnings report, Forbes Online projects Level 3 as a survivor, citing its liquidity (which includes $1 billion in cash and a $650 million credit line). On the newsstand, the latest issue of Forbes reviews improving fortunes at Loudcloud, which is recognized for its cost controls and ability to refocus its business after its initial business model died along with the dot-com sector.

One interesting tidbit from the Loudcloud piece underscores the challenge facing today's struggling service providers. Loudcloud execs told Forbes it typically takes 150 days to close a sale. Given the current rate of disintegration in the data center sector, that's an eternity. Five months ago Sigma Networks was hailing the completion of its buildout, Exodus was looking for a buyer, and Global Crossing was announcing new customer wins. Now Sigma is liquidating, Exodus is part of Cable & Wireless and Global Crossing is in bankruptcy.