Despite the woes in the telecommunications industry, analysts and companies at the Robertson Stephens Optical Communications Conference on Tuesday maintained their faith that certain sectors can serve as safe havens. The communications industry is in a slump, but areas such as equipment for metropolitan networks, components for long-distance fibre-optic gear, and chips for third-generation, or 3G, wireless equipment could endure the turmoil better than the rest of the market, according to analysts and executives. For example, Robertson Stephens analyst Arun Veerappan believes companies that make components for "core" network equipment are most likely to weather the environment better than other component makers. Core, or long-haul, equipment transports data between cities, while metropolitan networks handle traffic within cities. Long-haul component makers, rather than the long-haul equipment makers, are attractive to Veerappan because the product life cycle is longer than in other categories and the gear commands a higher profit margin. Still, Veerappan predicted "anaemic" demand from telecom carriers, a sentiment shared by many in the industry. "The broadband revolution has slowed dramatically," said Robertson Stephens optical-equipment analyst Paul Johnson in his opening remarks at the conference. But he thinks the growing demand for Internet services will eventually spur growth and force phone companies to improve their networks' slow spots, which many believe reside in the metropolitan area. Industry watchers have put faith in the companies that make optical equipment for the metro market, such as ONI Systems, which reported solid earnings on Monday and even predicted revenue and customer growth for the rest of the year. Johnson believes that selling to established local phone companies must also be a priority because the phone carriers spawned from the boom times of the past few years have mostly withered. Established phone companies have little motivation to spend money like they did last year because competition has faded. Equipment companies may have to play a waiting game for the next few quarters regardless of the strength of their technology, analysts said. "The problem with this market is that it appears to be controlled by [Baby Bells], which seem to not be in a hurry to make new investments," Johnson said. See techTrader for the latest technology business news. Have your say instantly, and see what others have said. Click on the TalkBack button and go to the techTrader forum Let the editors know what you think in the Mailroom. And read other letters.