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TWST: What are the criteria that you try and hold when you look at some of the developments that are going on? When you’re looking at specific companies when you’re following and tracking, what are some of the main criteria that you’re sticking to?

Mr. Dixon: The value driver in this business, indeed in any business actually, is the ability of a company to identify a customer base or a customer type and to create an interaction between a customer base and an appropriate product set. That’s true of any industry at all. If you’ve got the right product and the right customers, you deliver the product and the customers send you money. Really, the art in building new telecommunications businesses is in being inventive with the products set and being opportunistic. We are seeing this happen with communications companies getting into things like Internet application hosting, web hosting, and so on, and getting involved in more broadband services, getting involved with things like innovative tariffs with bundling and cross-product tariffing. We’re seeing a lot more innovation and flourishing of new types of communications products. The other thing where companies are showing that they can be very successful, especially again the start-ups, is in identifying particular sorts of customers in particular geographic locations. Some go for financial service companies in big city centers. Some are concentrating on small or medium enterprise customers in provincial towns. Some are going squarely at the consumer market. This is something that the cable companies, for example, in Britain are doing: offering telephone service alongside cable TV and getting some cost advantages in doing that. The important drivers really are when you go and see a company. When you analyze what a company is doing, have the management got a clear view of what their target marketplace is and what products they’re going to hit them with? And if they’ve got that, engineers are good at solving problems and they’ll find all that stuff and deliver it and make a success on it.

TWST: Now that we’ve certainly set the stage of what’s going on and what’s coming, why don’t we talk a bit more specifically? Let’s start off with your core holdings. What are the things in the sector that you just have to have?

Mr. Dixon: You mean in terms of types of company you should be investing in?

TWST: No, even specific companies that investors are always secure with, something that not only promised steady growth in the past, but something that looks good in terms of all of the changes that we’ve talked about.

Mr. Dixon: I think I have to tell you truly that the answer is that there is no such thing. The industry is going to go through such a very big change that it is difficult to know. I’ve just been looking at a report that some other brokers are forecasting that British Telecom’s (BT.A.L) first quarter results, which are going to come out tomorrow, are going to be something in the region of £450 million pre-tax profit against last time around £770 million. This is a company which is showing a very big decrease in its rate of profitability and that was not expected as recently ago as about three months by most analysts. Now, it happens that I have a market underperform rating on British Telecom, and I’ll tell you that it is the only market underperform rating of any stock in the Robertson Stephens universe. We have however many hundred analysts covering however many hundred stocks and the market underperform on BT is the only one the company has out at the moment. It’s not very long ago that you might have said that a company like BT was a core holding in the communications business. People, as well me, are asking questions about how certain that is. In terms of what I’ve just said there about BT, do be careful to say it accurately and I’ve stated the facts of the case there on BT. You know, because I’ve got it down in the market perform, don’t infer that that means that I’m saying BT is going to disappear or something or it should never be part of anyone’s core holdings. There’s a price for every stock.