Communications equipment spending rebounding, say S&P equity analysts

July 29, 2004 New York -- A rebound in expenditures on enterprise networking equipment and telecommunications--the two main markets for communications equipment--is underway and is expected to continue throughout 2004, reveals a semiannual study of the industry conducted by independent investment research provider Standard & Poor.

July 29, 2004 New York -- A rebound in expenditures on enterprise networking equipment and telecommunications--the two main markets for communications equipment--is underway and is expected to continue throughout 2004, reveals a semiannual study of the industry conducted by independent investment research provider Standard & Poor. The survey, "Industry Survey on Communications Equipment," takes a close look at the issues affecting the industry, including industry convergence, accelerating data traffic, the transition to packet switching, Voice-Over-Internet Protocol, third generation (3G) networks, and building out the last mile, or "edge," of the data network to bring high-speed communications into more households and businesses.

"Convergence of the global communications infrastructure toward a series of linked networks presents long-term opportunities for communications equipment providers," reports Ari Bensinger, communications equipment analyst, Standard & Poor's Equity Research Services and author of the survey. "As telecom and cable companies enter each others' markets, they will need to upgrade their infrastructure. The more competitive environment will also create new demand for companies that can help customers build and manage multipurpose networks."

"Spending on communications equipment should continue to improve as we anticipate telecom services providers will spend $30 billion in 2004, even with last year but a reversal of steep spending declines in previous years," he adds. "Positive key economic indicators, such as higher employee payroll growth, point to an improving technology spending environment among enterprise customers."

"Industry Survey on Communications Equipment" is part of the Standard & Poor's "Industry Surveys" series, produced by its senior equity analysts, that keeps a watchful eye on 52 U.S. industries, offering insights into trends and conditions that affect leading companies' market performance. For more information, visit www.standardandpoors.com.

More in Business