Service Provider Outlook Slides

Sage Research recently updated the July edition of its bi-monthly Service Provider Confidence Index, quantifying the mood of service providers on current market conditions and near-term expectations for the industry.

by ISP-Planet Staff [August 12, 2002]

Natick, Mass.-based Sage Research, Inc. recently announced the results of its July 2002 Service Provider Confidence Index (SPCI). The July SPCI shows both the current conditions and expectations indices falling, though some indicators did improve.

In the current SPCI survey, service providers continue to report tough current conditions and declining expectations in the industry, with both SPCI indices falling measurably since the May 2002 survey, and precipitously since January 2002.

Chris Neal, Sage research director, said the research firm expected a bit of downturn, given current economic conditions.

"Given the recent financial news involving the service provider industry, we anticipated the declining mood reflected in the current SPCI," Neal said. "The silver lining, however, is that service providers have told us that both current and expected conditions for two vital indicators, capital expenditures and employment, have improved in the face of this mood."

Sage Research began compiling the bi-monthly SPCI in January 2002. In the July SPCI, the current conditions index sits at 29.5 out of 100, a 4 percent drop from May data, and a 16 percent fall from January (Table 1). The accompanying expectations index continued to dive steeply, falling to 52.4 percent. While still considered in "high" territory (greater than 50), it nonetheless represents a 7 percent fall from May, and a 16 percent decrease from January's high of 65 (Table 2).

According to Sage Research, investor confidence and overall conditions were among the falling indicators in both indices, while the confidence in capital spending and employment surprisingly rose since May.

The research firm tracks the moods of services providers through a survey that takes a look beyond the current conditions and expectation indexes. It compares current conditions and expectations figures from the different types of service providers surveyed, including:

• Incumbent carriers
• Competitive carriers
• ISPs and webhosting providers
• Long distance and interexchange carriers

The Sage SPCI is a tracking study, with data collected bi-monthly. The current SPCI includes responses from more than 100 service provider professionals worldwide.

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