Bankruptcy Envy – Telecom industry
Byline: Liane H. LaBarba
As children, we all learned that when things didn’t go our way, sometimes the best answer from our parents was, “Life isn’t always fair.” The same goes for those who complain that companies that re-emerge from Chapter 11 debt-free have hurt those that never filed in the first place. Like it or not, that trend will continue. As more service providers go through bankruptcy, some players will inevitably surface with lower debt loads. But service providers that never filed for Chapter 11 shouldn’t spend their energy fuming about the less-leveraged competition; they should stay focused on surviving. Sure, pricing pressures will continue and more providers will falter, but waves of consolidation and change are exactly what the industry needs to inspire its resurrection. And let’s face it: Even though some players may re-enter the market with little or no debt, their battle is far from over. The stigma of a bankruptcy isn’t easy to overcome, nor is entering the current market as a reinvented company. Existing providers that have stayed afloat on their own can now wear that badge of courage proudly. The resurrected companies can only smile sheepishly and thank the gods they were given a second chance. Even though it might not seem fair that some providers will now have much lower costs while their competitors play with the original hand they were dealt, the bottom line is that only the strongest providers – new or old – will survive.
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