Just as in the United States, carriers abroad continue to suffer from economic uncertainties. European telcos, in particular, are suffering under relentless debt burdens – France Telecom and Deutsche Telekom owe $80 billion and $66 billion, respectively – incurred from eroding revenue and the 3G wireless-spectrum bidding wars. Regions like Asia and Latin America – where the number of wireline access lines is still expanding along with the number of wireless subscribers – are the only places that wireline-oriented carriers can still easily flourish. Unlike in the United States, wireless has yet to whittle away at wireline demand. RBOCs lost 1.8 million access lines in the second quarter versus the same period last year. ILECs lost 2.2 million, according to Merrill Lynch. Although these economies are relatively volatile, the potential opportunities for growth are enormous. Asia, China and Korea in particular, are seeing rapid adoption of wireline services and broadband. And Brazil, the economic powerhouse of Latin America, is experiencing a healthy enough demand for data and access lines to affect revenue growth for the country’s main telco, Brasil Telecom.

Public companiesBrasil TelecomHerring Take: The principal provider of wireline communications in Brazil, expect Brasil Telecom to keep growing heartily as data needs and the number of access lines continue to increase. In the most recent quarter revenue was up almost 15 percent year over year to $644 million. Analysts project this pattern to continue, driven by DSL revenue growth as well as additional lines – which grew 10 percent in 2002 to $3.4 billion and are expected to increase by 2 percent annually for the next few years. The number of DSL lines grew 18 percent to 195,000 in the last quarter.

China TelecomHerring Take: With nearly $9.1 billion in revenues last year, China Telecom is a listed subsidiary of the unlisted China Telecom Group. It is the incumbent wireline provider of telephony, data, and leased line services in the four most-economically developed regions of China. The company is slated to acquire wireline holdings in an additional six provinces, which will grow its installed base of access lines from 61 million to 106 million – 62 percent of the total for China. If the company sticks to developing its wireline prospects without venturing into the expensive and competitive wireless market, China Telecom will have enormous potential for future growth.

Hanaro TelecomHerring Take: With phenomenal revenue growth based on broadband and voice services, this South Korean competitive local exchange carrier is riding the enormous popularity of broadband in that country. The second-largest broadband provider behind Korea Telecom, it has 3 million subscribers and generated $294 million in revenue in the latest quarter. Increased revenue per subscriber, reduced marketing spending, plus continuing to lower the churn rate will help Hanaro improve its earnings. These may be realistic goals, as broadband in Korea may be mature enough to move past the costly gimmicks.

Private companiesBharat Sanchar NigamDate founded: N/ANumber of employees: N/AFunding (millions): N/ANumber of rounds: N/AKey investor(s): Held publicly by the Indian government

Herring Take: The fixed-line segment is dominated by state-owned companies Bharat Sanchar Nigam Ltd. (BSNL) and Mahanagar Telecom Nigam Ltd. (MTNL). BSNL, India’s largest telco, plans to double its 43 million access lines by 2005. So far, the company has invested more than $20 billion in its telecom infrastructure. Since 1999, the Indian government has been moving to deregulate the telecom industry but it still has wireline telcos that are solely state owned. Private sector wireless is relatively competitive, with four other major players. It remains to be seen if the government will privatize its telcos and open wireline to competition.

InterouteDate founded: 1995Number of employees: 300Funding (millions): $1,600Number of rounds:1Key investor(s): Sandoz Family Foundation

Herring Take: The long-term and huge financial commitment of this company’s backers have helped it build the largest pan-European network in terms of reach, capacity, and metropolitan area networks in 18 of Europe’s largest metro areas. As others go bankrupt, expect debt-free Interoute to be a long-term player. Its offerings will have to be robust as it competes against all the major European telcos. Products and services include bandwidth, virtual private networks, high-speed Internet access and transit, managed hosting, communications services, and media streaming.

United Platform TechnologiesDate founded: 2003Number of employees: N/AFunding (millions): $50Number of rounds: 1Key investor(s): Walden International, Doll Capital Management, Intel Capital, Jerusalem Venture Partners, Morgenthaler Ventures, New Enterprise Associates, Shanghai Alliance, Sycamore Ventures, Sumitomo Electric

Herring Take: The only first-round company featured on this list, United Platform is adopting a risky, and potentially lucrative, strategy. The company is planning to assist as a third-party middleman between telcos and equipment vendors as the networks in Beijing are built out to accommodate that city’s hosting of the 2008 Olympic Games. The city and the Chinese government have committed $14 billion to build out resources and facilities in preparation for the games. United Platform is hoping not just to profit from this event, but to use it to stake a claim in China by capturing a percentage on the networks created. Banking on this strategy could be a boon to the company – or quite possibly a catastrophe.