Upstart carriers, such as Level Three and Qwest, have suffered similar fates. Even equipment makers have gotten whacked. Indeed, the telecom malaise has taken few prisoners. But the big sell-off might have bottomed out. According to MacLellan, fears that telecoms are drastically curbing capital spending in the face of slowing revenue growth won't be borne out.
Many analysts feel that telecom stocks are now good buys again.
Take Dave Powers, the senior tech strategist for investment bank Edward Jones. After Nortel reported earnings, Powers upgraded the stock from hold to buy. The biggest problem has been with investor expectations, not with Nortel's fundamentals. Indeed, the basics for telecom remain robust. The current generations of optical devices remain crude and somewhat hard to produce and install.