Spending on communications hardware such as routers and switches should continue to rebound through 2004, an S&P study said Thursday.
According to S&P, telecommunications companies should spend about $30 billion on network and transmission gear this year, roughly the same as last year but up significantly from the first part of the decade. The firm cited accelerating data traffic, an industry transition to packet switching, voice-over-Internet-protocol and the rise of third-generation networks for its prediction.
"Convergence of the global communications infrastructure toward a series of linked networks presents long-term opportunities for communications equipment providers," the report stated. "As telecom and cable companies enter each others' markets, they will need to upgrade their infrastructure. The more competitive environment will also create new demand for companies that can help customers build and manage multipurpose networks."
S&P's survey came a day after
raised its revenue growth guindance for the September quarter to 8% to 13%. Analysts had been forecasting growth of roughly 2%.
The study said economic factors such as higher employment "point to an improving technology spending environment among enterprise customers."
Among the sector's big stocks,
was up 5 cents, or 1.6%, to $3.12;
added 29 cents, or 1.4%, to $20.79; JDS added 27 cents, or 12%, to $3.37;
rose 17 cents, or 4.9%, to $3.67;
rose 10 cents, or 2.8%, to $3.62 and
added 35 cents, or 1.6%, to $22.52.