A recent report in Moody’s Investors Service suggests that telecommunications service providers are likely to resume revenue growth in Europe, the Middle East and Africa (EMEA) as economies recover from the global downturn.
The report puts forward Moody’s expectations for the industry over the next 12-18 months.
Cost-cutting measures and staff reductions necessitated by the economic downturn “have resulted in more efficient operating structures,” said Carlos Winzer, Senior Vice President at Moody’s and lead author of the report.
“In line with our expectations for GDP growth and renewed consumer spending, we believe that EMEA telecom companies will be able to maintain solid cash flow and margins,” continued Winzer.
But the pace of growth will be slow, he said. The report suggests an annual growth rate of 1-3 percent between 2011-2013. “The pace of growth will be slow because of the expected slow macroeconomic recovery, as well as the mature nature of the industry combined with competitive and regulatory pressures,” said Winzer.
The report added that emerging markets will continue to represent growth opportunities, particularly as broadband and mobile penetration remains low and prices high in certain countries. In response to high investment costs, network sharing and collaborative agreements are also likely to continue to emerge.
Sallie Pisch
