Recession hurting vendors more than operators - Ovum

Dylan Bushell-Embling
12 May 2009
00:00

While the global recession is having an impact on the entire telecom industry, equipment suppliers are doing it tougher than service providers, Ovum said.

The US mobile market grew by just 3.4% in the first quarter, Ovum said, but these results were heavily skewed by the poor performance of Sprint, which saw revenue fall 12%. Excluding Sprint\'s results, mobile revenue grew by 8.7%, in line with the global average.

Revenue from fixed operations declined 3.2% year-on-year during the first quarter, compared to pre-recession growth rates of between -1.8% and +0.5%.

"Both mobile and fixed service provider revenues are down a few percentage points compared to pre-recession rates. Given the double-digit declines seen in many other industries, we take this as good news," said John Lively, Ovum\'s VP of forecasting.

To achieve these results, operators have been cutting capex. Fixed operators have reduced capital spending by an average of 16%, while mobile operators slashed capex by 27% - reductions that have clearly hurt suppliers, Lively said.

"Revenues declined 15% on average, with Alcatel-Lucent down 6.9%, NSN down 12.1%, and Cisco down 21.5%," he said. "Operating margins were down across the board, with some - including Alcatel-Lucent and NSN - reporting losses."

Further down the supply chain, component revenues declined around 20% and contract manufacturing revenue fell nearly 28%, Lively said.

Related content

Comments
No Comments Yet! Be the first to share what you think!

This website uses cookies

This provides customers with a personalized experience and increases the efficiency of visiting the site, allowing us to provide the most efficient service. By using the website and accepting the terms of the policy, you consent to the use of cookies in accordance with the terms of this policy.