The telecom equipment market is breaking out of its prolonged slump, clearing the way for a number of potentially large initial public offerings (IPOs) and an increase in strategic industry mergers and acquisitions, according to a major new report released by Heavy Reading, the market research division of Light Reading Inc.
The report, Telecom Recovery Investment Opportunities, delivers a comprehensive market and financial analysis of 21 critical telecom equipment market segments, pinpointing the product sectors and individual companies that will benefit most from the growing upsurge in spending by telecom carriers worldwide.
The report identifies more than a dozen privately held companies that are likely either to file an IPO or to become a strategic acquisition target in coming months.
“There is real pent-up demand for tech IPOs on Wall Street today,” notes Scott Clavenna, Heavy Reading’s Chief Analyst and author of the report.
“After three brutal years, the telecom systems market is finally poised to offer up a few contenders for IPO. A select group of private companies have landed marquee customers, doubled or even tripled revenues, and bulked up management teams in the past year, setting the stage for a revival in public offerings in 2004 and 2005.”
The 141-page report covers more than 250 private and public telecom equipment vendors, including more than 160 private companies. It also catalogs telecom investments of more than 400 venture capital groups, providing an in-depth guide to the current investment landscape.
Other key report findings include:
Access equipment and high-value IP now hold the greatest potential for investors in startups. A six-point analysis of market conditions indicates that the best risk/reward scenarios can be found in specific product sectors within these two broad categories.
M&A activity will continue to gain steam as big vendors scramble to fill gaps in their product lines. Recent acquisitions by Ciena (Nasdaq: CIEN – News) and Juniper Networks (Nasdaq: JNPR – News) point to a definite upswing in acquisition activity, with Tellabs (Nasdaq: TLAB – News) and Motorola (NYSE: MOT – News) among the likely buyers.
The “triple play” of voice, video, and data presents solid growth prospects for startup suppliers. Triple play is now at the heart of service provider competitive strategies in a growing number of regions and markets. Right now, the field for triple play is wide open for equipment makers, presenting significant opportunities even for some early-stage startups.
