- The Top 20 global service providers generated USD251 billion in revenues during the first three months of 2009; 3% up on Q108 but 1% down on Q408
- The Top 10 telecoms technology vendors generated USD59 billion in revenues during the quarter; 5% down from Q108 and a whopping 15% down from the last quarter
- Wireless subscriber additions in the quarter fell off the pace a little as 153 million net new subscribers were added, 10 million fewer than in Q408
- No less than 48% of Q1 wireless growth came from India and China which enjoyed an exceptional quarter; growth slowed in many other markets with Western and Eastern Europe being particularly slow
- Countries like France, Germany, Italy, Poland, Ukraine and the UK were all essentially flat in terms of mobile user growth, or even in slight decline
- Broadband subscriber additions during the quarter came in at 14 million, in line with Q408 additions. China accounted for 30% of global growth; the US was the only other country to add more than 1 million subscribers in the quarter
Many may see bad news above, but reaction ought to be tempered in light of the cyclical nature of the market; the final quarter of any year tends to be the biggest quarter for sales and there is often a drop-off experienced in the first quarter of a new year. That said, in 2009 the global recession has clearly affected the market.
The global telecoms service market is experiencing a gradual slowdown in growth, caused not by the world economy but by near saturation in many well-developed markets. Historic growth in this market has been over 6% but TeleGeography forecasts that will drop to an average 3.5% over the next five years. Against this backdrop, the 3% year-on-year revenue growth for the Top 20 service providers can be seen as too sharp a fall, happening too soon. It should also be noted that the 3% growth is bolstered from mergers and acquisitions, and is not just organic growth. The best organic growth performance came from China Mobile, Vodafone and America Movil.
Set against the longer-term trends the quarterly growth for wireless and broadband subscribers were a bit on the soft side, but they are still reporting decent growth despite a trying economic environment.
The biggest hit in the quarter was clearly on the telecoms equipment vendors, which have been hit with a treble whammy of reduced spending by consumers, service providers and enterprises alike. Huawei, Samsung, RIM and LGE had at least some cause to be pleased with their Q1 revenues, while Nokia, Cisco, Motorola and Alcatel-Lucent will be struggling to take any good news from theirs. Bottom of the class Nortel, meanwhile, dropped out of the Top 10 ranking altogether.