Networking firms Nortel Networks and Avaya have given resellers encouragement by announcing improved financial results and further focus on IP telephony and wireless data products.
Nortel reported yearly net earnings of $732m (£402m) for 2003, compared to a net loss of $3.27bn (£1.8bn) in 2002.
Avaya also had a promising first quarter, with net income of $10m improving on its $121m loss for the same period last year.
Frank Dunn, Nortel's president and chief executive, said in a statement: "While we expect that the percentage growth in the overall capital spending by our customers will be in the low single digits in 2004 compared to 2003, we expect to grow faster than the market."
Nortel said it plans to achieve this by focusing on Voice over IP and wireless data solutions.
Analyst firm IDC, which has predicted a 50 per cent growth in IP telephony this year, was encouraged by the firm's focus.
Chris Barnard, research manager for IDC's telecoms and networking division, said: "It's not a surprise that Nortel is taking this focus; there are lots of legacy systems out there that can be transformed to IP networks."
Nortel also announced plans for a trial with BT in an attempt to significantly reduce service provider costs for transporting high-speed data from Wi-Fi networks to wired broadband.
Compared to the fourth quarter of 2002, Nortel's EMEA sales decreased by five per cent, but showed an 11 per cent increase on the third quarter in 2003.
Its wireless networks revenues increased by 33 per cent, whereas enterprise networks saw a slight decrease of two per cent.
Avaya said an increase in IP product sales across large and small customers had helped to boost sales.
"Our customers are increasingly turning to IP telephony to deliver real improvements in business value," said Don Peterson, chairman and chief executive of Avaya, in a statement.
Avaya said it hoped to maintain similar results for next quarter and was meeting customer demand through the introduction of new software applications, media servers and wireless IP phones for converged networks.
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