The fortunes of telecommunications equipment providers have closely followed those of computer manufacturers whose products complement the internet technologies which companies like Tellabs develop.
Tellabs designs and manufactures optical networking, broadband access and switching equipment. Major customers include Eircom and British Telecom together with cable companies like NTL and Chorus.
"As the demand for internet access increased, particularly last year, a lot of telecommunications services built out their infrastructure in anticipation of continued increased demand and then when the bubble burst in the market, the demand for telecommunications decreased," said Mr Pat Shanahan, managing director of Tellabs Ireland.
"It left a lot of the telecommunications service providers with excess capacity in their network and they only need to buy equipment for their day-to-day usage," Mr Shanahan said.
Purchasing orders for Tellabs declined drastically this year, leading to a shortfall in turnover and severe pressure on profits. "We are anticipating a pretty flat year. We are not anticipating any major recovery until later in 2002," Mr Shanahan said.
He added that Shannon, which has 150 people involved in research & development activities and also operates as a marketing base, continues to be important strategically.
Competitors such as Lucent, Nortel and Alcatel have fared little better. Nortel made a second quarter loss of $19.4 billion (€21.2 billion), Lucent is seeking 49,500 lay-offs worldwide and had a third quarter loss of $3.25 billion, and Alcatel has announced the laying off of 20,000 workers.
Nortel is cutting 30,000 jobs, including 90 jobs in Galway and 800 in Belfast.
However, Mr Shanahan, who is also chairman of the Shannon Regional Innovation Strategy group, added that the recession in the technology industry should not discourage continued national investment in telecommunications infrastructure.
"The fact that high technology industry is going through a bad patch should not necessarily prevent continued investment in good, solid infrastructure and the continued investment in high technology education.
"There are critical imbalances in telecommunications, in our energy infrastructure and in our road infrastructure that need to be addressed."
