New York -- Former AT&T Broadband president Leo J. Hindery Jr. told a
group assembled here Tuesday that if the telecommunications industry is to
recover from its recent downturn, it needs its own 'Summer of Love.'
Speaking at the Waller Capital Corp. 'Telecom 2001' conference, Hindery
warned that the exponential growth in the number of industry participants --
1,700 at his count -- along with a limited market, the high capital costs
associated with the business and the strength of incumbent providers could spell
doom for a large number of companies.
'Faced with similar circumstances and prospects in the winter of 1996, the
cable industry embarked on a two-part strategy, which I strongly recommend today
for the telecom industry,' Hindery said. 'That strategy was hallmarked by a very
quick industry consolidation -- what some of us called the `Summer of Love' --
and by quality of execution.'
Hindery also had some harsh words for cable overbuilders, adding that he
doesn't think any overbuilder strategy will work because it is a response to a
perception of vulnerable competition, and not an opportunity to increase
shareholder value.
'The overbuilders I see are just reactionaries,' he said.
