Global telecoms growth stalling

The mobile phone market has slowed dramatically in Europe

The telecoms services market is beginning to stall, according to the latest telecoms update from research firm TeleGeography.

The top 20 global service providers generated $251bn (£153bn) in revenues during the first three months of 2009, representing an increase on the same period last year of just three per cent. The growth was not just organic, but was bolstered by mergers and acquisitions.

An impressive 48 per cent of this growth came from India and China, while markets in Europe were singled out as being particularly slow.

TeleGeography suggested that the slowdown was caused by the recession and the near saturation in many developed markets.

Revenues at the top 10 telecoms vendors totalled $59bn (£36bn) in the quarter, a five per decrease since the same period in 2008.

The report said that the best organic growth performance came from China Mobile, Vodafone and América Móvil, mainly because of the steady growth of wireless and broadband subscribers.

Wireless subscriptions became less popular this year, reaching 153 million at the beginning of 2009, a decrease of 10 million since last year.

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

Meanwhile, it was the telecoms equipment vendors that took the biggest hit in the quarter, particularly Nokia, Cisco, Motorola, Alcatel-Lucent and Nortel. This was down to a "treble whammy of reduced spending by consumers, service providers and enterprises alike", according to the report.

TeleGeography predicted that growth in the telecoms services market, which has always been over six per cent, will drop to 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.