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Caveat vendor

Telecom equipment suppliers extended billions in vendor financing to aggressive start-ups and wireless companies. Many of them are now struggling or bankrupt – and their suppliers are suffering too according to this article from the McKinsey Quarterly.

Vendors need to scrutinize borrowers more closely and to adopt better risk-management techniques.

Bad news for the telecom sector came to light with the revelation that telecom-equipment suppliers had fuelled some of their meteoric growth by extending finance to high-tech and telecom start-ups that are now having difficulty meeting their payments.

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