Nemertes Impact Analysis:

The planned $2 billion investment by AT&T (NYSE: T) in 3G/4G wireless infrastructure highlights several trends in the area of communications services. First, the investment is designed to accelerate Internet access for many users. As Nemertes has predicted since 2007, there is a paucity of Internet access capability, specifically in the mobile area. Both AT&T and Verizon (NYSE: VZ) are making significant investments in data capabilities in 2010, primarily to support Internet users. Second, mobile infrastructure and services are a consistently important area for enterprise users. Last year, companies reduced IT budgets and headcount by roughly 20%, yet mobile budgets increased an average of 16%. Finally, data services comprise an increasingly critical component of mobile services--most companies are seeing the data portions of their budgets increase (including text messaging and email) while voice components consistently decline.

Impacts::

Enterprises: Focus attention on mobile services, particularly concerning data services and coverage.

Vendors: Do not neglect mobile access to your products and services, and remember that access to products and services that rely on broadband Internet access may be hampered by lack of availability.

Investors: Enterprise mobility continues to be a growth area in 2010. Look for devices and services with competitive edge in bandwidth, security, and reliability.

Johna Till Johnson, President & Sr. Founding Partner

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