The founders and backers of Internet-based companies have been crying for the past year with the shakeout in the sector. But the real weeping is going on in the international telecommunications companies, especially those like Bermuda-headquartered Global Crossing Ltd.

Global Crossing's particular financial race is to ensure current revenues continue building enough to offset the massive spending needed to build and maintain its network. The company and other international telecommunications firms are spending billions building international fibre optic networks worldwide in anticipation of an increased demand for Internet and data capacity.

That ambition sounds like the familiar 'Build it and they will come' refrain voiced by Internet companies last year. Now that many analysts are anticipating a communications sector slowdown and a glut of fibre-optic capacity, Global Crossing's stock has not escaped the market's dim view of the sector.

The market value last year of telecom companies and network equipment makers soared to $2.7 trillion but has now fallen to $1 trillion, according to Birinyi Associates research company. That's a loss of $1.7 trillion in stock market wealth, greater than that created and lost through dotcom companies.

Global Crossing's stock closed at $7 per share on July 30, a dramatic fall from the US$61 high in February 2000. The company launched its initial public offering at $19 in 1998 and is listed on the New York Stock Exchange and the Bermuda Stock Exchange.

You can tell investors are screaming by the class action lawsuit launched on July 27 against Global Crossing and the company's underwriters, alleging that the initial public offering contained ''material misrepresentations'' and omissions about the company and the stock price.

In particular the investors are alleging that the underwriters received excessive commissions by making secret agreements with some of their top customers to sell them stock in a bid to inflate the price when the company traded on the open market. If you bought the securities of Global Crossing between August 13, 1998 and December 6, 2000 you might be interested in the claims, available at http:////www.milberg.com//globalcrossing.

What ever the outcome of the claims, Global Crossing's current price is below the book value of the company, which is listed at Yahoo! as US$11.66.

At the current price 15 out of 17 analysts covering the stock recommend either buy or hold on the stock. But the company's second quarter figures, due to be released today (1 August) will tell the tale of whether revenue growth will continue or show signs of a setback for the ambitious company.

Global Crossing posted revenues of $1.08 billion for the quarter ended March 31, 2001 compared to $907 million in the same period last year, a 19 percent gain.

The company posted a loss of $675.4 million for the first quarter 2001, compared to a loss of $348.1 million a year ago. Total debt stands at about $7.5 billion.

One good sign that Global Crossing could be a survivor in the forecast shakeout in the sector is the company has completed 90 percent of its proposed network. In June the company announced that the core network linking 27 countries and about 200 major cities in Europe, North America, South America and Asia was completed. Capital spending for continued operations during 2001 is expected in a range of $4.9 billion to $5.1 billion.

Funding has been raised through the sale of assets to other companies, existing cash reserves, and the sale of bonds. The company entered the second quarter with about $1.8 billion in cash, and net proceeds of about US$1.6 billion from sale of Global Crossing's local exchange carrier in the US to Citizens Communications Co.

Unfortunately the sale of the company's web hosting services business, GlobalCenter, Inc., to Exodus Communications for 108.2 million Exodus common shares has not worked out as anticipated. Exodus shares have fallen to $1.20 on July 30 from $18 a share at the close of the transaction in January this year. Global Crossing's stake has therefore dropped in value to $130 million from $1.9 billion.

The company, and the telecommunications sector, therefore presents a mixed picture for investors. However, in refuting claims in a Wall Street Journal article claiming that the company had restructured its business to shore up its revenues, Global Crossing announced in June 2001 that everything was going according to plan.

''Global Crossing is not heading in a 'far different' direction than its original vision,'' the company claimed in a press release. ''It has long planned to move beyond a wholesale 'carrier's carrier' model to exploit the power of its global network to serve commercial customers and create shareholder value.''

The company added that it has ''always expected rapid price reductions for bandwidth, and all of its projections have assumed such declines. Indeed, Global Crossing is the driver of lower prices, not the victim of them.''

Whether to invest in Global Crossing or other competitors vying for the same piece of the action depends on whether you believe the growth in data and Internet communications will take off for these companies.

Others, such as Howard Barlow of Wolverine Asset Management, believe there will be further bloodletting before such a recovery. ''It's tough,'' he was quoted as stating in The Street magazine. ''I've sensed for a long time that warfare in that industry is going to claim a lot of casualties, and it has.

Many have gone belly up and many will follow.''

With the confused state of the technology sector these days, those brave enough to stomach a wild market can only place their bets and hope the cables start humming with data traffic.

Tech Tattle deals with topics relating to technology. You can contact Ahmed at editoroffshoreon.com or (33) 467901474.