Global telecoms growth stalling

The telecoms service market is beginning to stall, according to research firm Talegeography.

The top 20 global service providers generated US$251bn in revenues during the first three months of 2009, only a three percent increase since the same period last year.

The growth was also not just organic but bolstered by mergers and acquisitions.

Of that growth, no less than 48 per cent came from India and China, while markets in Europe were singled out by Talegeography as being particularly slow.

Talegeography said the slowdown was likely to be because of the recession but also because of the near saturation in many well-developed markets.

When it came to the top 10 telecoms vendors, revenues were US$59bn during the beginning of 2009, a five per decrease since the beginning of 2008.

The US report noted the best organic growth performance came from China Mobile, Vodafone and America Movil, mainly because of the steady growth of wireless and broadband subscribers.

Although wireless subscriptions have also become less popular this year with 153 million people subscribing at the beginning of 2009, a decrease of 10 million since last year.

And broadband subscriber additions during the quarter came in at 14 million, which is the same as last year, but China accounted for 30 per cent of that global growth, and the US was the only other country to add more than one million subscribers in the quarter.

Meanwhile, the biggest hit in the quarter was on the telecoms equipment vendors, particularly Nokia, Cisco, Motorola, Alcatel-Lucent and Nortel. The report noted this was due to “a treble whammy of reduced spending my consumers, service providers and enterprises alike”.

Telegeography forecast the past growth in the telecoms service market, which has always been over six per cent, to drop around three per cent in the next five years.

“Against this backdrop, the three per cent year-on-year revenue growth for the Top 20 service providers can be seen as too sharp a fall, happening too soon,” the report warned.