Still, more than 450,000 jobs disappeared around the world this year in the telecommunications industry, after breakneck expansion during the last five years.
After Congress approved the Telecommunications Act of 1996, which strengthened competition in areas like the Internet and wireless and long-distance communications, investment in the industry surged. Capital spending climbed at an average rate of 17.7 percent a year from 1996 to last year, compared with average annual growth of 7.5 percent in the 30 years before 1996, according to Credit Lyonnais Securities.
"It's difficult to put the current situation into historical context because never before has there been the level of spending as in 1996 to 2000," Gabriel Lowy, an analyst at Credit Lyonnais, said. Lowy forecast this year and next year would be the worst years for telecommunications equipment spending since the mid-1960s.
Yet there is no shortage of optimism at companies that are pinning their hopes on better times next year, like the Covad Communications Group, a provider of fast Internet service that won a judge's approval last week to emerge from bankruptcy. "By the end of the year we should see a modest recovery," said Charles Hoffman, chief executive of Covad, which is based in California.
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