TyCom is among the best positioned to weather any inventory correction the market may experience. TyCom is the best performer in an exceptionally weak sector.
Investors have grave concerns about oversupply in the market.
With five new transatlantic cables coming into service between late 2000 and mid 2001, the worries are well founded. Further, customers are leasing capacity, instead of purchasing IRUs, in order to conserve capital and to wait for a bottom in pricing. This practice reduces cash flow to the industry. In a positive sign, TyCom's recent Transpacific cable joint-build agreement with FLAG Telecom reduced the potential number of new Transpacific cables from four to three. TyCom Well Situated Despite a Difficult Environment First, the company has a superior financial position.