After bounce back in 2011, telecoms to see slower growth

The telecom industry bounced back in 2011, with capex growing an estimated 12 percent to  $314 billion, and revenues increasing 7 percent to $1.96 tillion, but continued global economic woes are likely to dramatically slow both through 2017, a new report says.

Service provider revenues are likely to move forward at a CAGR of 2.9 percent over the 2010-2017 period, less than half the historic CAGR of 6.3 percent achieved in 2004-2010, said research firm Ovum. Capex, too, is likely to see a similar moderations, slowing to 3.1 percent from 2010 to 2017, down from the 6.5 percent CAGR the industry saw in 2004-2010.

"2011 represents a good bounce-back for the industry," said report author and Ovum principal analyst Matt Walker, adding that "macroeconomic weakness is constraining top-line SP revenue growth. Service providers are coping with this reality by aggressively attacking their cost structures, both capex and opex."

Service providers, he said, are likely to focus on a number of tools to control costs, including network sharing, software-based network elements and features, pay-as-you-grow contractual terms, joint procurement and M&A.

To contain opex, the report said, carriers will continue to grow outsourcing options, which has helped expand the telco infrastructure services market to $71 billion.

For more:
- see this release

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