Many may see bad news above, but reaction ought to be tempered in light of the cyclical nature of the market; the final quarter of any year tends to be the biggest quarter for sales and there is often a drop-off experienced in the first quarter of a new year. That said, in 2009 the global recession has clearly affected the market.
The global telecoms service market is experiencing a gradual slowdown in growth, caused not by the world economy but by near saturation in many well-developed markets. Historic growth in this market has been over 6% but TeleGeography forecasts that will drop to an average 3.5% over the next five years. Against this backdrop, the 3% year-on-year revenue growth for the Top 20 service providers can be seen as too sharp a fall, happening too soon. It should also be noted that the 3% growth is bolstered from mergers and acquisitions, and is not just organic growth. The best organic growth performance came from China Mobile, Vodafone and America Movil.
Set against the longer-term trends the quarterly growth for wireless and broadband subscribers were a bit on the soft side, but they are still reporting decent growth despite a trying economic environment.
The biggest hit in the quarter was clearly on the telecoms equipment vendors, which have been hit with a treble whammy of reduced spending by consumers, service providers and enterprises alike. Huawei, Samsung, RIM and LGE had at least some cause to be pleased with their Q1 revenues, while Nokia, Cisco, Motorola and Alcatel-Lucent will be struggling to take any good news from theirs. Bottom of the class Nortel, meanwhile, dropped out of the Top 10 ranking altogether.
For more information on GlobalComms Insight or Q1 2009 telecoms trends please visit www.telegeography.com/products/gcomms_insight/index.php or call +1 202 741 0020 to speak to an account manager.