There are conflicting signals on how bad the recession is hitting thetelecom/network industry. Equipment sales are down, but that may notmean demand for bandwidth has been affected.Considerthis: Kris Thompson of Montreal’s National Bank, who watchespublicly-traded North American communications companies (including notonly Nortel and Cisco, but also Microsoft and Oracle) recently totaledlayoff announcements between October and early March. The count: Some58,000 people from 44 companies have been given pink slips in companiesranging from ADC Telecommunications (just outside Minneapolis) toZarlink Semiconductor of Ottawa. And the first quarter isn’t over yet.Buthas network demand dropped along with corporate revenues? Not accordingto Philippe Morin, who heads Nortel’s Metro Ethernet division. In aninterview from San Diego, where he spoke Tuesday at the Optical FibreCommunications Conference, Morin cautioned me not to link layoffs withbandwidth. He told his audience that the recession is in fact drivingpushing demand. Some North American newspapers are closing their printeditions and shifting to new online models, he pointed out, whileorganizations are making more use of video conferencing to cut downtravel costs. “The new economy is driving people to look at newbusiness models,” he said, “and they’re all leveraging bandwidth as away to get into better profitability.” In addition, high speed-capablehandheld devices have shifted from nice-to-have to necessities, whiledemand for high definition video is soaring. Nortel believes in thenext 24 months consumers will insist on electronic devices that canhandle HD content.

So far from retrenching,Morin told his audience the optical industry will being forced by thesetrends to continue to innovate – in fact he urged the next big goalshould be to leap from 100 Gigabits per wavelength (about to come onthe market) to 1 Terabit per lambda in, say, three years.A bigchallenge. Is it justified with weakened equipment manufacturers aswell as buyers? We’d like to hear from you.

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Jim Love, Chief Content Officer, IT World Canada