After the Telecommunications Bubble

An unprecedented “boom and bust” investment cycle occurred in the high-tech industries at the turn of the century, in particular in the telecommunications sector. Regulatory reforms and technological innovation fuelled expectations of robust growth in traffic, revenue and earnings. Eventually, however, the volume of traffic expanded less than anticipated. Faced with severe financial difficulties, telecommunication firms sharply curtailed their investment and embarked on restructuring. The impact of such restructuring on the overall economy has been relatively small, but it has had severe upstream effects on equipment suppliers and technology firms. Confidence is now slowly returning to the sector thanks to the efforts of companies to strengthen their balance sheets and to renegotiate their debts. Although the necessary restructuring now underway in the industry is painful, governments and regulators should resist the temptation to provide relief to companies by easing competition ... Apres la bulle des telecommunications Le changement de siecle a ete marque par un cycle sans precedent d'expansion rapide suivie d'un effondrement de l'investissement dans les industries de haute technologie, notamment dans le secteur des telecommunications. Les reformes de la reglementation et l'innovation technologique ont nourri les anticipations de croissance forte du trafic, des recettes et des benefices. Mais finalement, le volume du trafic n'a pas progresse autant qu'on l'esperait. Confrontees a de graves difficultes financieres, les entreprises de telecommunications ont fortement reduit leur investissement et elles se sont engagees dans une politique de restructuration. Cette restructuration n'a eu sur l'economie generale qu'une incidence relativement limitee, mais ses effets ont ete particulierement marques en amont, sur les fournisseurs d'equipements et les entreprises de technologie. La confiance revient maintenant lentement dans le secteur, grâce aux efforts des entreprises pour renforcer leurs bilans et ...