Distress? Really? Paper Says XO, Others in Trouble

The Washington Post is reporting a “new financial crisis” for smaller telecom companies such as XO Communications (XOHO) and equipment maker Ciena Corp. (CIEN).

The paper ran a Nov. 3 article that looked at competition among providers — it said the smaller firms are taking on “piles of debt” to build cell towers and bury fiber to compete with the big guys (AT&T Inc., Verizon Communications Inc.).

“That has left some, such as Ciena, Cogent and XO Communications, more vulnerable to market instability as demand dwindles for services from businesses and consumers, analysts say,” the Post reported.

But, um, didn’t XO recently report a full erasure of its debt?

Guess we’ll have to wait until the company finally reports its third-quarter earnings to find out whether it’s taken on more financing. Somehow, though, we kinda doubt it.

We also haven’t seen substantial negative financial press on Cogent or Ciena as compared with the rest of the telecom industry.

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