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EVENT SPOTLIGHT
A dismal economic outlook and substantial currency fluctuations will present new challenges for telecommunications players over the next two years. Much of the recent news in the sector has centered on the overall decline in the global economic picture and on some pre-emptive actions by equipment manufacturers and service providers in developed markets to shed thousands of jobs. Although the downturn began in the US, it has now extended to many parts of the world, with GDP contractions predicted in Japan, Ireland and the UK; even some emerging markets such as Mexico are expecting year-on-year GDP growth to be below 1%. In South Korea and Australia, among other markets, a slight economic expansion in local-currency terms should take place in 2009, yet the deterioration of their currencies relative to the US dollar will lead GDP per capita levels in the two economies to contract 15% and 22% respectively in US dollar terms. All of this affects the purchasing power of both consumers and service providers negatively.
Pyramid Research forecasts that the telecom services industry will experience almost flat growth in 2009. We expect the market to recover in 2010, driven by a combination of factors such as the increased availability of multiplay bundles as well as versatile and competitively priced devices, from handsets to laptops. Emerging markets will remain dynamic throughout the forecast period.
Author: Leslie Arathoon, Gabriela Baez
Publication Date: December 2008
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