Research by forecasting firm Frost & Sullivan reveals the global telecommunications industry is one of the few industries likely to benefit from the economic downturn.
Frost & Sullivan principal analyst Sharifah Amirah, based in the UK, says this is because enterprises are looking to minimise risk and improve operational efficiency. “The focus on core competencies and reducing operational costs will open doors for IT and telecommunications service providers.”
Amirah points out that rising unemployment rates and falling GDP growth are having an impact on consumer spending. Value-added services and innovative distribution models will be key to growth, the analyst adds.
“While focus will be very much on surviving the next couple of years, sights on further horizons should still be retained. In the longer term, three key themes will prevail - mobility, content and bandwidth."
Amirah believes the industry is moving towards divestment, consolidation, collaboration and greater investments in research and development.
Local view
On the local front, Frost & Sullivan analyst Lindsey Mc Donald says: “The South African telecommunications industry will not be as badly affected by the economic crisis from a revenue perspective, compared with other industries such as the construction industry.
“Technology trends such as IP telephony have got an increasing role to play to cut company costs and improve functionality.”
However, IDC analyst Richard Hurst says this will not completely save the South African telecoms industry from feeling financial strain.
“I wouldn't say the telecommunications industry will do well; it will also come under pressure to provide cost savings for clients.”
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