www.smartmoney.com/news/on/index.cfm?story=ON-20071016- -
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Published on: 10/16/2007
Last Visited: 10/16/2007
Jason Chapman of research group Gartner said network upgrades have come to a near standstill in the U.S. because none of the big operators, such as AT&T's (T) Cingular, Sprint-Nextel Corp. (US-S) and Verizon Communications (VZ) , want to jump first, particularly as an increase in data traffic has been too gradual to justify hefty outlays.
"Put yourself in their shoes.They can afford to wait and watch the data-services revenue trends.Why spend a dollar now if you don't absolutely have to?No one wants to be last, but no one wants to be first either," he said.
But the lack of spending isn't limited to the U.S.
Svanberg said the situation is glum in the U.K. too, where most upgrade work has been put on hold as several operators discuss network-sharing agreements.
Chapman said there's little doubt the lack of spending witnessed by Ericsson and Alcatel-Lucent is an industry-wide problem.
"I don't think Ericsson's loss is anyone's gain," he said.
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Chapman said the rising importance of emerging markets and increasing competition in the industry means vendors can't afford to ignore these contracts.
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Looking at upgrades, they will only do it when it's absolutely necessary," Chapman said.