America's No. 1 financial conglomerate

Chapter 363 Technology is the Key

With the deal finalized, Ernst and Ivan Setonberg left Lehman Brothers as the morning sun streamed through the gaps in the skyscrapers into the concrete jungle, as if celebrating the success of their trip.

As the car rounded the corner, a towering building with its glass curtain wall reflecting the dazzling sunlight came into view. Ivan Setonberg suddenly straightened up and looked at Ernst beside him. "Why don't we take a look at Merrill Lynch? I think they'll definitely be interested in this project, and maybe they'll do what Lehman Brothers did and put up another $4.5 million."

Having witnessed how Ernst had Wall Street under his thumb, he thought that if he could successfully make a trip to Merrill Lynch, he might be able to cover all the costs of setting up this dedicated line.

The mainland telecom company didn't even need to pay the principal; it was practically a perfect script for getting something for nothing.

Ernst followed Ivan's gaze out the window; the car happened to be stopped at a red light at the intersection where Merrill Lynch's headquarters were located.

He looked up at the magnificent building, its glass curtain wall reflecting the blue sky and white clouds. But in his eyes, this building would be the site of one of the most devastating traffic accidents in history in just a few years.

No wonder some people say that the World Trade Center was a conspiracy orchestrated by the Americans themselves; I used to think it was all nonsense.

Because the cost was too high: the national economy suffered enormous losses, the international image was severely damaged, and influence declined, among other things.

But now that his position is different, and he's dealing with different people and things, he feels that things are getting increasingly suspicious.

The World Trade Center is home to the headquarters of major corporations, so you would expect it to be full of executives and elites. But in that accident, very few of the really important people were killed or injured. Isn't that too much of a coincidence?

More importantly, in this incident, it was the state-owned capital that suffered huge losses, but what about the financial capital? They made a fortune, even happier than if they had shorted a country.

It was precisely the time when the little cowboy came to power that allowed the financial capital behind the donkey to make a fortune. Even state-owned enterprises in industries such as military and oil also took the opportunity to reap benefits.

This is quite intriguing.

It's not to say that this traffic accident was orchestrated by American capital, but who can guarantee that they weren't fueling the fire behind the scenes, trying to make dirty money off this mess?

Financial capital can short the market and acquire global wealth. The military and oil industries behind national capital have a reason to instigate war, and both sides profit. There is nothing that cannot be negotiated.

As for the influence of the United States, the US is now so powerful that it has become arrogant. Even if the World Trade Center were bombed again, it would not shake its status as a global hegemon.

As long as there is profit to be made, these capitalists are capable of anything, not just risking their own country, let alone snatching chestnuts from a fire.

But it doesn't matter to Ernst whether he gets a share or not; he'll definitely want a piece of the pie eventually.

He withdrew his gaze from the Merrill Lynch building and explained, "Merrill Lynch is different from Lehman Brothers. Lehman had common interests with us and could help us keep secrets, but Merrill Lynch couldn't."

"Believe it or not, the moment we step out of Merrill Lynch's door today, they can package up our plan and sell it to Goldman Sachs in exchange for some leverage."

"For Merrill Lynch, it doesn't matter whether we have this dedicated line or not. They just need to make sure that they can get on board when the dedicated line becomes available."

Ernst leaned back in his chair and continued his analysis, "If they find out about our plan, they can just sell the information to Goldman Sachs and those telecom giants. Then, no matter who ends up building the dedicated line, Merrill Lynch will get a piece of the pie. Anyway, they won't be the ones who lose out."

"But we're different. Secrecy is the most important thing for us, not funding."

Ivan pondered for a moment and immediately understood.

Merrill Lynch has always been known on Wall Street for its speculation. As long as there is profit to be made, they will not only sell information about their partners, but they have also stabbed each other in the back.

"So what about the remaining funds? Are you planning to pay for them yourself?"

"Pay for it yourself?" Ernst laughed upon hearing this, a meaningful smile curving his lips. "I'm not that generous as to use my own money to install a dedicated internet connection for Wall Street."

Just as Ivan was waiting for Ernst to continue explaining his thoughts, Ernst abruptly changed the subject, asking a seemingly unrelated question: "Do you know why I chose you to be the CEO of Continental Telecom?"

Ivan paused for a moment, then subconsciously shook his head.

He had actually thought about this. In the American telecommunications industry, there were plenty of people with more experience and achievements than him. Even if Ernst invited him personally, those people would be scrambling to come if a headhunting firm called.

But he still doesn't understand what it was about him that caught Ernst's eye.

Seeing Ivan's confused expression, Ernst gave the answer: "Because when you were at Bell Atlantic, you dared to withstand the pressure and insist on quickly advancing the FIOS deployment plan."

"FIOS?" Ivan was taken aback, not expecting this to be the reason.

FIOS, also known as fiber optic, has been commercially available since the 80s, with the first transatlantic fiber optic cable being put into use in 1988. However, at present, its market share is less than 0.1%, and calling it a niche technology would be an understatement.

"You know the current situation: major telecom companies are simply unwilling to invest money in fiber optic infrastructure."

Ernst slowly analyzed, "On the one hand, the cost of fiber optic cables has not come down yet, and they are much more expensive than copper cables; more importantly, the lines are readily available if copper cables are used for transmission."

Back in the 1980s, major companies had already laid copper cables to upgrade telephone lines, so we can use them directly now without spending any extra money.

Ivan nodded repeatedly. As a seasoned veteran who had been working in the telecommunications industry for over a decade, he knew the intricacies of the situation better than anyone else.

Major telecommunications companies are now adopting a cost-saving mentality. Since copper cables are usable, why waste money on fiber optics?

"But fiber optics is the future trend, and no one can stop it." Ivan's tone was very firm, which is why he has been pushing for fiber optics at Bell Atlantic.

"Copper cables can attenuate signals by up to 99.99% per kilometer, while fiber optic cables only attenuate by 99% per kilometer. This means that the cost of subsequent equipment can be greatly reduced. For example, the number of signal amplifiers needed can be reduced by more than half when using fiber optics. Not to mention the improvement in network speed."

Ivan knew perfectly well that the entire telecommunications industry was waiting for the price of fiber optic cables to come down, for the cost of related equipment to come down, and for others to test the waters first.

But he felt that they should seize the market in advance, because fiber optics is a powerful tool for reshaping the telecommunications industry.

Although the initial costs will be much higher, the payback period will be longer, and the profits will be thinner, as long as you can get in early, it is definitely a wise decision in the long run.

By laying fiber optic cables first, you can secure users and then capture the market by the time other companies realize what's happening.

"The headhunting firm's materials clearly stated that you place particular importance on the updates in telecommunications technology, which is exactly what I value most."

Ernst looked at Ivan with a hint of admiration in his eyes. "In the internet age, technologies related to the internet are updated faster than flipping through a book. You might be ahead today, but you could be left behind tomorrow. If you fall behind, it won't be so easy to catch up."

"Take fiber optics for example. If you lay the main cable now, you can grab the users first. By the time other companies want to enter the market after the cost of fiber optics drops, the internet speed will have already entered the next era."

"By then, others will already be using existing fiber optic cables and have developed faster and better technologies. How will those latecomers compete then?"

When Ivan heard this, he was both surprised and delighted. He never expected that his persistence in Bell Atlantic would become the key to being chosen by Ernst.

But after the initial surprise, he became confused again: "I understand everything you're saying, but what does this have to do with our fundraising efforts?"

Ernst smiled, but instead of answering directly, he posed another question: "Do you remember the research report you submitted to Bell Atlantic before?"

Ivan frowned, wondering which copy he was referring to.

"It's about Bell Labs, the report on full-wavelength fiber optics," Ernst reminded him.

"Full-wave fiber optic?" Ivan slapped his thigh suddenly, finally remembering.

But the next second, his eyes widened, and his voice trembled slightly, "You wouldn't be thinking of partnering with the telephone and telegraph company to get the remaining funds from them, would you?"

Ernst nodded, making no attempt to hide his thoughts. "It's not about raising funds, it's about selling this project to AT&T. More precisely, it's about making a win-win deal with them."

Ivan was even more bewildered. "Partnering with AT&T? Aren't you afraid they'll turn around and scam us?"

Having worked in the telecommunications industry for a long time, he knew AT&T's methods all too well. As an industry giant, AT&T has always liked to take on smaller companies, and very few of the companies that cooperate with them can retain their control in the end.

Ernst understood Ivan's concerns. He gently tapped on the car window, his tone calm. "The telecommunications industry has always been tough. Even if the new Telecommunications Act loosens restrictions, the rules and regulations can still be confusing. Information security and privacy are just excuses for the giants to suppress their competitors. There's a lot of dirty stuff going on inside."

"Newcomers like us can easily be tricked by those telecom giants and fall into an abyss if we're not careful."

If possible, Ernst would not want to compete in the telecommunications industry, but he also knew that the telecommunications and media industries in the United States would become increasingly intertwined in the future.

Which of the six major media groups that followed wasn't formed through the integration of the telecommunications industry?

He doesn't want to turn his media empire into a pawn in the hands of telecom giants.

Since they can't avoid it, they might as well do the opposite and acquire a telecom giant to take control.

What do you rely on?

China Telecom is just a small pawn, a stepping stone for him to infiltrate AT&T later. What he really needs is a technological monopoly.

AT&T, on the other hand, had the technology Ernst needed.