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Global Telco Revenues Hit $2trn but Growth Slow
Source: totaltele.com
Source Date: Thursday, January 03, 2013
Focus: Electronic and Mobile Government, ICT for MDGs
Created: Jan 08, 2013

Mobile broadband is key segment for operators, Ovum advises; vendors must position themselves carefully.

Revenues generated by telecoms operators worldwide surpassed US$2 trillion in 2012, but growth is slow and as such telcos will have to work hard to target the right segments, Ovum reported on Thursday. Meanwhile, equipment makers could find times tough going forward as limited revenue growth impacts on operators' ability to spend.

"The recovery from the 2009 recession has been weak, and the ongoing global fiscal crisis continues to present a risk to the telecom industry," noted John Lively, chief forecaster at Ovum.

Indeed, this time last year the analyst firm revealed that telecoms service provider revenues grew by 7% in 2011 to $1.96 trillion, but warned that revenue growth would be slow over the subsequent five years. This year's figure suggests a growth rate of just over 2%.

"Over the next three-to-four years, both fixed and mobile operators will face the same fundamental challenge: to increase new sources of revenue fast enough to offset the decline in mature services," Lively said.

Mobile operators could find themselves in a stronger position than their fixed-line counterparts though.

According to Ovum, 60% of the $2 trillion-plus revenues generated last year went to mobile operators. In addition, the analyst firm identified mobile broadband as the "single largest opportunity for telcos to claw back revenue," predicting that the sector will grow by 19.2% annually and generate $122.9 billion in incremental revenue between 2013 and 2016.

There is some good news for the fixed-line firms though. Other segments reporting double-digit revenue growth over the next five years will include public cloud, Ethernet, IPTV and managed/hosted IP voice, Ovum predicts.

Infrastructure vendors, meanwhile, will have to position themselves carefully to generate revenue increases of their own. With service provider revenues overall experiencing low single-digit growth, capex is likely to be constrained.

"To grow revenues faster than the industry average, Ovum recommends that vendors position themselves in one or more high-potential product segments, such as converged packet optical, ROADMs, 40G/100G networking gear, carrier WiFi, and network-related services," the analyst firm advised.
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