Motorola sees network industry recovery in 2004

NEW ORLEANS: Wireless technology firm Motorola Inc. said on Tuesday it continues to see a modest increase in industrywide network equipment sales in 2004 after a decline of 6 per cent to 12 per cent this year.

"We're expecting growth to return in 2004 but it'll be modest," said Adrian Nemcek, president and chief executive of Motorola's Global Telecom Solutions Sector, which makes equipment for the wireless operators around the world.

"We're looking at four percent, five percent industry growth," he told Reuters at the Cellular Telecommunications & Internet Association wireless conference here.

Nemcek said he believed the decline in network equipment sales in 2003 will mostly be seen in the first half of the year and level off in the second half of the year.

Motorola estimates that the industry saw an 18 percent decline in sales last year as customers slashed capital spending amid a slowdown in the economy.

Chicago area-based Motorola's comments are in line with those of the world's largest network equipment maker Ericsson, which reiterated on Monday that it expected up to a 10 percent decline in industrywide sales.

Nemcek said he believed recovery in the industry will be driven by an economic turnaround, restructuring among wireless operators, and a pent-up need to beef up networks as customers spend more time on their mobile phones.

While most of the world has suffered from cutbacks in capital spending, he said the company is still seeing growth in relatively young markets such as China, Southeast Asia, Middle East and Africa.

"We believe emerging markets are a bright spot and are going to continue to be a bright spot," he said, adding that 83 percent of future growth in wireless users is expected to come from the budding markets.

Nemcek reiterated that his unit was essentially done with its restructuring