Parts shortages hinder AT&T's network upgrade

A shortage of electronic components is making it difficult for wireless equipment makers to meet the demands of wireless operators that are trying to upgrade their networks or sell the latest next-generation smartphone. 

According to the Wall Street Journal, component makers reduced their production during the recession, but now that demand has accelerated they are scurrying to ramp up and deliver components to their customers. Thus, equipment makers such as Ericsson (NASDAQ:ERIC) and Alcatel-Lucent (NASDAQ:ALU) are on the hunt for new suppliers with components on hand.

The fallout from the components shortage is making it difficult for AT&T (NYSE: T), which has been trying to upgrade its network, to ease capacity issues. The company has said that it doesn't expect the component shortage to ease before the end of the summer.

Component shortages are also impacting Verizon Wireless (NYSE:VZ), which last month said shortages of screens produced by Samsung are making it difficult to deliver the popular HTC Incredible smartphone to consumers as quickly as desired.

In May, Alcatel-Lucent said a component shortage in the first quarter meant it was unable to fulfill some orders from customers, leading to a decline in revenue and a wider net loss.

For more:
- see this WSJ article (sub req.)

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