For wireless telecommunications equipment companies, the last few years have undoubtedly been the worst of times. Ongoing excess capacity, soft demand and globalization trends will all combine to exert downward pressure on prices, even as the market begins to recover in the next 12 months. Therefore, we will see a gradual and unsteady return to more historical levels of demand and pricing. The only certain and good thing that can be said about a downturn of the magnitude we have experienced is that it too will end.

Focusing exclusively on the tough conditions, however, does not seem all that relevant, since all companies have the same playing field. The focus should always remain on winning in the market and not just surviving. Historically, down markets are times when large changes in market share and company fortunes occur. For those reasons alone, these may be the best of times for agile companies focused on fewer but more promising geographic markets and product offerings. Sharp downturns often force a refocusing on core strengths, customers and markets, which is rarely a bad outcome.

As demand increases, winning companies will be those achieving a balance among continued investment in their core business, finding innovative ways to trim costs and delivering true value to their customers. Flexibility and innovation across the board, in technology, business models and services, will be essential to delivering solutions with clear return-o-investment benefits. In the telecommunications market in particular, this will mean products and services that extend the life of existing infrastructure while delivering new revenue-generating services with reduced capital outlays and rapid ROI.

One of the new applications we see driving demand in next-generation networks is video mail. In Asia and Europe in particular, demand is increasing with the early rollouts of next-generation networks and the availability, albeit still limited, of video-enabled handsets. The business rationale is enhanced call completion and the ability to offer differentiated and more lucrative services, particularly to the youth segment. Video mail will be the natural successor to voicemail, which has been a mass-market service offering and large revenue and profit generator for carriers.

Dilithium Networks has thrived in this downturn by focusing its resources on growth markets in Asia and Europe and by providing innovative voice and video solutions for both existing telecommunications networks and those currently being deployed. It is because we have pursued this course that ,despite the rough playing field, we believe these are the best of times.