Service Provider 'Confidence' Ticks Up

Depressed over the lingering frailty of the telecom industry? Well, it’s time to change your tone and get with the times.

Despite worsening conditions in the sector, a service provider "confidence index" for September indicates that carrier confidence is on the rise for the first time since January.

The Sage Research Inc. Service Provider Confidence Index -- which can be found in Light Reading's Service Provider Circle -- is a bi-monthly tracking study of carriers’ current conditions and future expectations. Based on responses from 104 service provider employees from across the industry and across the globe, the index covers six categories: capital and equipment spending, product and service development spending, revenues, employment, investor confidence, and overall industry conditions.

From the time of its inception in January, the index’s carrier confidence levels have been in steady decline. But although confidence in September was still 7 percent lower than in January, it jumped 15 percent from the July numbers. While four out of six confidence indicators were up last month, the new optimism was especially driven by the belief that we’ll soon see an increase in spending on new products and service development. And more than half of the respondents reported that their revenues were up slightly since July.

While a lot more service-provider employees seem to think that investor confidence is about to turn, the current conditions index showed that investor confidence in the industry has actually reached new lows. This, along with a continued drop in capital spending, pushed the "current conditions" results for September further along the steep downward slope the industry has been on all year, slipping 4 percent from the July numbers to new index lows.

All the current condition indicators did not follow this bleak picture, however. More panelists last month reported improvements in spending on new products and service development, revenues, employment, and overall industry conditions, which rose for the first time all year.

To view the full index, please see: Sage Research Service Provider Confidence Index September 2002.

— Eugénie Larson, Reporter, Light Reading
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