"The telecom sector is still a buyer's market despite reduced competition with WorldCom's bankruptcy," said Bertrand Bidaud, the research firm's director for Telecommunications and Electronic business.
WorldCom, which overstated its earnings by about US$3.9 billion, has been saddled with debts of US$30 billion.
"Enterprises should re-examine their contracts to determine whether the specified rates reflect today's market conditions, and resolve long-standing grievances in the areas of service and support," said Bidaud.
However, customers should not expect dramatic discounts dished out in the past, Bidaud said. Two years ago, prices for corporate services--such as frame relay, Asynchronous Transfer Mode, IP Virtual Private Network and leased line--were slashed by up to 40 percent, in some cases.
It's a different story today as service providers are no longer willing to sacrifice profits for revenue, he said. Service providers must ensure that they're in the business for the long haul as customers are wary of the high costs associated with switching providers.
In the end, government-linked telcos will emerge winners in the current environment of distrust and suspicion, which has stemmed from corporate misconduct in American boardrooms.
As such, telcos like Singapore Telecommunications, Telstra and Japan's NTT stand to gain from the crisis, Bidaud said.
Lehman Brothers analyst Peter Milliken had reportedly said he sees Singapore Telecommunications as the greatest beneficiary from WorldCom's woes because of the scale of the former's Asian investments, relatively strong financials and reputation for quality.
