Nortel takes the big dipper - fails to come back up the other side

However at least one passenger was absent from the ascending carriage - Nortel Networks. The Canadian equipment vendor went down from an already fairly 'down' position and stayed down.

With its share price at one point at just $2.68 (after a consolidation) it is now worth just over one tenth of its annual sales. Most companies are usually valued at from one to 3 times (or even more) their revenues - investors have to believe they're sick and getting sicker to let the valuations sink below that, but that unfortunately, is what Nortel appears to be.

There have probably been mistakes made by senior management and lessons to learn from Nortel's dire performance. But the performance also points to the fact that the market for telecom equipment has changed so much that the old equipment behemoths just can't work properly within it any more.

In the 1990s the world's rapidly expanding and heavily-investing telcos looked to 'big iron' providers of network infrastructure to provide comforting complete solutions, whether in mobile or fixed infrastructure.

Big was beautiful because it promised hand-holding, security and global reach for the customer. So companies such as Nortel, Lucent and Alcatel expanded and bought their way into new technologies. It all seemed to go extremely well.

The party ended in 2001 when the carrier spending stopped and the big vendors - especially Nortel - started shedding staff and trimming their ambitions. Ever since, the telecom market has been progressively turning away from the big and bold to the cheap and specialised.

It's partly to do with the technology. On both fixed and mobile sides increasingly commoditised hardware and strong standards have tended to favour the incoming specialist.

Then there has been cut-throat competition around the by now well-understood and mature technologies such as IP network gear and 2G mobile network infrastructure.

Chinese vendor Huawei in particular has taken its markets by storm, radically undercutting existing players and giving carriers what they want and need - ever-cheaper network infrastructure.