After a flurry of earnings calls yesterday the overall picture for the third quarter is clear: revenue growth remains extremely tough to achieve for the leading telecoms service providers. Based on local currencies, quarter-on-quarter growth came in at just under 1% with year-on-year growth at 1.6%. Acquisitions did not play much of a role in the quarterly growth, but for a handful of the companies revenues have nudged upwards over the past twelve months thanks to consolidation of revenues from acquired companies. Take those out of the equation and annual growth was pretty much zero.
According to TeleGeography’s GlobalComs Insight service Western Europe is the region where competition and recession are biting the hardest and most service providers are seeing their revenues from the region declining. While the Japanese and US markets are also struggling, the drop-off in revenue has not been as marked as in Western Europe. The rest of the world is a mixed bag, but mostly revenues are continuing to climb, as reflected by growth performance among the top 30.
The chart shows annual revenue growth for each of the ten largest service providers, plus an aggregated figure for those ranked 11-30. Of those companies featured, growth at Verizon and Deutsche Telekom is largely thanks to acquisitions. Vodafone’s growth looks strong at first glance, but this is a little flattering – it reports its earnings in GBP but makes the bulk of it revenues in EUR and other currencies distorting the true picture. Over the last year strongest organic growth among the top 30 has been achieved by MTN, America Movil, Carso Global/Telmex, China Mobile and SingTel.
One milestone was successfully passed – the aggregated quarterly revenues for the top 30 service providers now exceeds USD300 billion. However it should be noted that this achievement was in part thanks to continued shifts in currency exchange rates. From Q2 to Q3 the US dollar exchange rate for the EUR, JPY and GBP all moved by 4%-6%, giving an apparent boost to total revenue numbers when reported in USD.
‘The market is taking a long time to recover, and even as the recession fades there is a hang over of increased price sensitivity and a focus on price-based competition. But there are some positive signs’ said TeleGeography’s John Dinsdale. ‘Underlying subscriber growth is still reasonably strong in most markets, and you can see many service providers trying to compete on factors other than price. Revenues did grow by 1% relative to the previous quarter, and while that is lower than the relative figure from 2008 it does show that there is some positive momentum’ added Dinsdale.
TeleGeography’s GlobalComms Insight provides detailed subscriber and market forecasts for over 160 countries and is a companion to the GlobalComms Database, a regularly updated online database of wireline, wireless and broadband competition. No other telecoms market research service rivals their collective geographic scope and depth of coverage.
For further information, please contact: John Dinsdale (firstname.lastname@example.org), visit www.telegeography.com/products/gcomms_insight/index.php or call an account manager on +1 202 741 0020