Report: Signs of recovery loom as telcos make $1.9 trillion


by Allan Swann| 12 April 2012

The telecommunications sector appears to be immune from recession, as telecommunications service providers boast a jump in revenue in 2011.

Service provider revenues, both mobile and fixed, passed the $1.91 trillion mark last year up 6% on 2010's $1.79 trillion.

The report by Ovum analyst Matt Walker said that carrier capital expenditure also rose in 2011, but late-year economic jitters depressed growth rates.

These economic worries saw budget cuts late in the year, hitting service provider capex. Capex grew 9% to $306 billion in 2011, due to double-digit percentage growth in the first three quarters - but declined 1% the last quarter.

Among the top 10 capex spenders were North Americans AT&T and Verizon (which is part owned by Vodafone), China's three big carriers, Japan's NTT, European multinationals Deutsche Telekom, Telefonica, Vodafone, and France Telecom.

Walker said that, while forecasts were on target globally, some regions did underperform.

"The only sizable 2011 surprise came in Middle East and Africa, where actual revenues and capex were 10 and 7 per cent lower than expected respectively. This is due partly to political volatility at year-end which affected some carriers' expansion plans," he said.

He also added that, while North America's revenues were 2% above forecast, a weak fourth quarter capex by Verizon and Sprint pushed 2011 pushed capex down 4%.

2012 looks better already.

"Signs have emerged in 2012 of a slowly improving economy, and further improvement should help reach the revenue goal and capex growth targets of 3 and 6 per cent respectively," he said.

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