Service Provider Optimism Continues Six-Month Rise in Sage Research's November Service Provider Confidence Index [3rd December 2003]

NATICK, Mass., Dec 3, 2003 (BUSINESS WIRE) -- Sage Research, Inc., a full-service market research firm, today announced the results of the November 2003 Service Provider Confidence Index (SPCI). The report, available via free subscription at http://sageresearch.com/SPCIForm_a.htm, shows a continuation of the six-month rise in the Expectations Index, which hit a new high of 73.3 (50 marks the boundary between "low" and "high" confidence). Meanwhile, the Current Conditions Index backed off slightly after rising rapidly in the previous two SPCIs, settling at 47, still just short of "high" territory. Correspondingly, all but one of the Current Conditions sub-indices fell in November, while all but one of the Expectations sub-indices rose, many of them sharply.

"Both main indices are much higher than they were at this time last year," said Chris Neal, a Sage research director. "This is despite the fact that the upward streak of the Current Conditions Index has come to an end. Employment is the silver lining there, but with the caveat that the rise in current jobs conditions is extremely modest."

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.

Investor Confidence Expectations Lead Sub-Indices

The main Current Conditions and Expectations Indices are each the average of six sub-indices (detailed below). All but one of the four of the twelve total sub-indices increased from July to September. The sub-index showing the most significant increase is Investor Confidence Expectations (the value of the NASDAQ index as an indicator of investor confidence over the next six months), rebounding 18 points to a two-year high of 107. In fact, the only Expectations sub-index to decline is Revenue Expectations, moving from 80 to 70, still well into "high" territory.

Conversely, all the Current Conditions sub-indices but one declined in November. The lone exception is Employment Current Conditions, which nevertheless shows only a modest rise, from 20 to 22. Capital Spending Current Conditions leads the declining sub-indices, falling 13 points to 54.

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, Inc.