InfoTech Marketing Press Release
For More Information, Call:
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Tim Walters -- (720) 732-4588 |
Wireless Inventories Balloon in Q3
Littleton, CO – Wireless inventories ballooned in the Third Quarter as carriers added almost $200 million in handset inventories. Coupled with a slight decline in the cost of equipment sold, the days of sales in inventory rose to 54.8 days from 47.8 days in the Second Quarter. Carriers held $1.7 billion of inventory at the end of the Third Quarter, the most in the past two years.
"While you may expect some inventory increase as carriers prepare for Christmas sales, the magnitude of the increase is much higher than expected," Tim Walters, President of InfoTech Marketing, commented. "Carriers have added over $400 million of inventory since the First Quarter, and strongly need to look at their ordering and management systems."
Newly included Ubiquitel achieved the best efficiency with 27.9 days of sales in inventory. Of the large carriers, Verizon led in efficiency, maintaining 42.8 days of sales in inventory.
“Wireless companies could generate $800 million of cash flow by reducing days of sales in inventory to 30 days,” Walters added. “Commitment to inventory management, better forecasting, and improved ordering procedures are techniques carriers can use to get to this level. Even if the carriers with over 40 days of inventory get to just 40 days, they would produce almost $500 million of industry cash flow."
The study compares 15 of the 25 largest wireless carriers with available data for both quarters. The Third Quarter for Cingular includes pro forma data for the Cingular and AT&T Wireless combination. The data originates from SEC filings or carriers’ investors relations departments.
InfoTech Marketing is a Littleton, CO based consulting company that assists carriers with inventory management. Wireless carriers around the world have used the company's inventory management services.
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2nd Quarter, 2004 |
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3rd Quarter, 2004 |
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Company |
Inventory |
Equip. Sales |
Days Sales in Inventory |
|
Inventory |
Equip. Sales |
Days Sales in Inventory |
|
|
(Mils.) |
(Mils.) |
|
|
(Mils.) |
(Mils.) |
|
|
Verizon |
$464.0 |
$975.0 |
43.3 |
|
$544.0 |
$1,168.0 |
42.8 |
|
Cingular |
$209.0 |
$505.0 |
37.7 |
|
$477.0 |
$837.0 |
52.4 |
|
AT&T |
$195.0 |
$620.0 |
28.6 |
|
- |
- |
- |
|
Nextel |
$461.0 |
$496.0 |
84.6 |
|
$483.0 |
$504.0 |
88.2 |
|
US Cellular |
$46.7 |
$110.2 |
38.6 |
|
$61.8 |
$126.7 |
44.9 |
|
Leap Wireless |
$31.2 |
$40.6 |
69.9 |
|
$33.3 |
$44.2 |
69.4 |
|
Western Wireless |
$24.3 |
$43.3 |
50.9 |
|
$32.2 |
$46.5 |
63.8 |
|
Centennial |
$16.0 |
$20.4 |
71.5 |
|
$11.7 |
$21.3 |
50.7 |
|
Nextel Partners |
$34.9 |
$38.3 |
83.0 |
|
$41.5 |
$34.2 |
111.5 |
|
Triton PCS |
$34.0 |
$31.8 |
97.2 |
|
$18.6 |
$29.9 |
57.3 |
|
Dobson |
$16.3 |
$27.9 |
53.4 |
|
$18.7 |
$30.2 |
56.8 |
|
Rural Cellular |
$7.9 |
$10.6 |
67.7 |
|
$7.4 |
$10.0 |
67.5 |
|
Alamosa PCS |
$7.3 |
$16.4 |
40.5 |
|
$6.8 |
$20.7 |
30.2 |
|
US Unwired |
$4.3 |
$15.1 |
26.1 |
|
$4.2 |
$12.5 |
31.0 |
|
Ubiquitel |
$3.4 |
$8.9 |
34.9 |
|
$3.1 |
$10.3 |
27.9 |
|
Total |
$1,555.3 |
$2,959.5 |
47.8 |
|
$1,743.4 |
$2,895.5 |
54.8 |
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