Another week, another crop of bad news from the telecoms industry. Ber-nie Ebbers, the chief executive of WorldCom, was forced out (see page 69). The share price of Qwest, another heavily indebted American telecoms company, fell to an all-time low, after it had announced a first-quarter loss of $698m. Siemens, a German company, said it would cut 6,500 jobs in its telecoms-infrastructure division, on top of 10,000 layoffs already announced. Marconi and JDS Uniphase, two other network-equipment vendors, announced or gave warning of gloomy results. Even as the broader economic climate begins to improve, the carnage in telecoms continues. "No bottom in sight," is how Ni-kos Theodosopoulos, an analyst at UBS Warburg, puts it. He notes that, historically, the telecoms sector tends to recover six months later than the economy as a whole. But this time, he says, there is evidence of bigger structural problems in the industry that will not be solved by an economic recovery. That suggests the industry must undergo painful rationalisation b efore things start to improve.
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