After a harsh winter, spring has finally come to Canada. The telecom equipment in-dustry, on the other hand, is still in the depths of its dark winter. It's tempting to think brighter days are just around the corner. After all, it couldn't get much bleaker, right? The recent lift in stock prices suggests as much: in March 2003, Nortel traded in the $3 to $3.50 range, well up from its 67¢ low in October, and sector compatriots like Lucent, Alcatel and Ciena all have had healthy gains compared with their lows six months ago. Nortel's fourth quarter, ended December 31, 2002, showed 7% sequential growth in revenue--a first in two years--and Alcatel's sales were up almost 29% in the same quarter. For instance, on March 12, 2003, Nokia cut its sales and earnings forecasts, largely placing the blame on a slump in network equipment sales by 15% to 20%. But the worst news--and the real reason to be concerned about any promise of a turnaround--is that the U.S. telecom industry is an utter mess. None of these problems are going away soon, and all of them weigh on the industry's ability to spend on new gear. Instead, telecom equipment vendors will have to rely on new customer segments or emerging markets like China. Nortel, for instance, has its sights on the wireless and enterprise markets. But how much real growth that will generate is questionable.