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TWST: Please give us an idea of what you are covering in this Internet
infrastructure space.
Mr. Davies: I follow semiconductor companies and component suppliers,
including those addressing networking and communications infrastructure
markets. TWST: From a business perspective, what's going on in that space at this
point?
Mr. Davies: From a business perspective, we see a number of
opportunities developing from service providers and cable operators
upgrading their networks to support triple play services ' that being
the ability to offer voice, video and data services over a common
infrastructure. TWST: What does that mean for the companies you follow?
Mr. Davies: What it means is that there is a battle going on in the
marketplace for subscribers, and the ability to provide enhanced
services over a common, low cost infrastructure is key in allowing
carriers to maximize their profitability. For example, if we look at
voice services now, it's been commoditized so that the average revenue
per user is declining to the point that voice is almost a freebie. The
most important services are those that add value and provide carriers
with additional revenue streams. Video applications provide higher
revenue streams but require an enhancement to their network
infrastructure, meaning they have to deploy new equipment to deliver
these enhanced services. For the companies that I follow, investment
into network infrastructure to offer video services provides a catalyst
for growth because the infrastructure upgrade requires more equipment
and subsequently more components and ICs.
Tickers included in this excerpt: AATI, ALA, ATYT, B, CSCO, CY, EXTR, FDRY, IDTI, JNPR, LU, MCRL, MSCC, NETL, NT, PMCS, T, TLAB, VLTR, VZ
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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