This week’s Telecom update from Merrill Lynch features a list of potential surprises that the analyst firm thinks might potentially impact telecom services stocks. The report carries the usual disclaimers about investing based on this information, and frankly anyone risking their money in the markets has to realize that the key word there is “risk.”
The list is being billed as low probability/high impact, which I guess is a suitable and appropriate hedge. After all, who knows what lies around the bend?
Anyhow, here are the predictions. I’m not sure how to react to VoIP’s absence from this list. Do they mean that VoIP’s growth is a given, and that nobody should be surprised by it? And what’s with the first entry? Sheesh! Today is depressing enough.
(I bolded the entries I thought were most germane to the usual topics discussed in this blog.)
(1) Economic growth slows unexpectedly.
(2) U.S. rate hikes lead to substantially higher GEM debt spreads and lower GEM equity valuations.
(3) Data revenue growth reaccelerates.
(4) Videoconferencing catches on.
(5) The long-haul data market stabilizes.
(6) “Third pipe” broadband access technologies (fixed wireless and/or BPL) gain momentum.
(7) Regulators look for ways to help telcos.
(8) Wireless competition turns tough.
(9) Smart phones become a mass market product.
(10) 3G mobile data applications catch on.