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Wireless Carriers Improve Inventory Management by 13% in Q3

Littleton, CO -- U.S. wireless carriers reduced their days of sales in inventory by 13% in the Third Quarter, 2003 over the Second Quarter, according to a study released today by InfoTech Marketing. Although the total amount of inventory increased slightly to $1.6 billion, the cost of equipment sales substantially rose by $500 million to $3.4 billion, thereby reducing the days of sales in inventory to 42.5 days from 48.6.

"As the wireless market matures, carriers are increasingly looking to better inventory management," according to Tim Walters, President of InfoTech Marketing. "Inventory control increases net income through reduced interest expense and frees cash."

Centennial Communications achieved the best efficiency with 23.4 days of sales in inventory. Centennial sold handsets costing $21.6 million in the Third Quarter while maintaining $5.6 million of inventory. Leap Wireless, with 24.4 days, closely followed.

“Opportunities still exist to free significantly more cash flow,” Walters added. “Many carriers continue well above the industry average. Attaining 30 days of inventory would generate over $470 million of cash flow to the industry. If the carriers with over 40 days of inventory get to just 40 days, they would produce $138 million of industry cash flow."

The study compares 16 of the 20 largest wireless carriers with available data for both quarters. The data emanates from SEC filings or carriers’ investors relations departments.

InfoTech Marketing is a Littleton, CO based consulting company that assists carriers with inventory reduction. Wireless carriers around the world have used the company’s inventory management services.

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