Despite the low margin opportunities of running an MVNO, entertainment companies see benefit of extending their brand and programming to their customers through mobility.
Key issues will be whether Cisco has lost a step or two in keeping its early mover advantage on new product fronts, and whether the company is getting too large to respond to rapid-fire market changes.
We believe the termination of talks with Corning does not take away from the earnings power or valuation potential of Nortel's optical or overall business.
Besides the continued trends of carrier consolidation around the globe, we see convergence and competition to new IP-based solutions called IMS leading to price pressure and lower margins.
The analyst meeting is a pivotal time for Cisco to build renewed investor confidence. We remain positive.
