Service Provider Expectations Rise Steadily Again in Sage Research's January Service Provider Confidence Index; Slight Decrease in Current Conditions [February 9, 2004]

NATICK, Mass., Feb 9, 2004 (BUSINESS WIRE) -- Sage Research, Inc., a full-service market research firm, today announced the results of the January 2004 Service Provider Confidence Index (SPCI). In the latest report, available via free subscription at http://sageresearch.com/SPCIForm_a.htm, the Expectations Index continues to rise, hitting a new high of 74.5 (50 marks the boundary between "low" and "high" confidence). Meanwhile, the Current Conditions Index continued to decline modestly, now standing at 46.2, just under the "high" confidence mark. All but one of the six Expectations sub-indices rose in January, while the most significant drop in Current Conditions sub-indices was for Employment.

"This latest survey shows a continuation of the waiting game between current conditions and expectations for the future," said research director Chris Neal. "Service providers continue to see good times around the corner, but their current mood indicates that corner is no closer than it was two months ago."

Sage Research began compiling the bi-monthly SPCI in January 2002. This free report measures and analyzes the current mood of telecommunications service providers. It signals to companies that sell products or solutions to service providers what their customers consider to be the present condition of the industry and what their expectations are for the near-term future.

Sub-Indices: Capital Spending to Improve, But Not Right Away

The main Current Conditions and Expectations Indices are each the average of six sub-indices (detailed below). The largest gaining sub-index is Capital Spending Current Conditions, rebounding after a sharp November dip to stand at 65. Ironically, the sub-index showing the most significant decline is Capital Spending Expectations, dipping 12 points to 55, signaling that service provider spending, while coming in the near future, is not as likely to increase immediately. Capital Spending is the only Current Conditions sub-index to decrease in the current report.

Also of note is that Employment Current Conditions nosedived nine points to sit at 13, still well into "low" territory (below 50).

Methodology

The Sage Service Provider Confidence Index is a tracking study, with data collected bi-monthly. For the current SPCI, Sage Research included responses from 100 service provider professionals from North America and worldwide, including:

-- Incumbent carriers (ILECS, RBOCS and PTTs)

-- Long distance carriers and IXCs

-- Internet, web hosting, and other network service providers

-- Competitive carriers

-- Application service providers (ASPs)

-- Wireless operators

-- MSOs and other cable companies

To compile the SPCI, Sage Research asks the respondents a series of questions about their organizations that probe both current conditions and expectations for the future. The questions cover six categories:

-- Spending on capital equipment

-- Spending on product and service development

-- Revenues

-- Employment

-- The value of the NASDAQ index as an indicator of investor
confidence

-- Overall perceptions of industry conditions

For each question category, Sage Research calculates respondents' current conditions and expectations values. The Current Conditions Index and Expectations Index are the per-respondent means of the values for each of the six question categories.

You may receive the complete current Service Provider Confidence Index, with methodology, for free by subscribing on the Sage Research Web site at http://sageresearch.com/SPCIForm_a.htm. Sage also archives previous versions of the SPCI on its Web site at http://sageresearch.com/SPCI_a.htm.

About Sage Research

Sage Research, Inc. is a full-service market research and consulting firm providing global demand-side research to technology product and service providers. With in-depth experience in the networking and telecommunications markets, Sage delivers actionable data and recommendations based on the most current qualitative and quantitative methods. Practice areas include customer loyalty, market segmentation, brand equity, business case validation, technology adoption, and product concept testing. Founded in 1993, Sage serves a broad client base that includes industry leaders and innovative start-ups. For more information, visit www.sageresearch.com.

SOURCE: Sage Research

Sage Research
Doug Haslam, 508-655-5400 x209
dhaslam@sageresearch.com