Global telecom revenues hit $1.8T

The global telecommunications sector bounced back from the 2008 financial crisis to record a 4 percent growth in revenue to US$1.85 trillion last year, according to a new report from Ovum.

The numbers reflected a reversal from 2009 when revenue fell by 4 percent, noted the report which was released Tuesday after assessing the 2010 financial performance of carriers worldwide. It added that the upswing was driven by strong growth in the mobile segments of the BRIC (Brazil, Russia, India and China) economies.

The research firm noted that the improvement in numbers indicated that recovery in the telecoms industry was on track.

Matt Walker, principal analyst at Ovum, said in the report: "It's too early to break out the champagne just yet, but within the context of a slowly improving global economy, the telecoms sector is returning to sustainable growth.

The report noted that service provider capex (capital expenditure) for the overall market dropped by 3 percent last year, compared to a 9 percent decline in 2009. Carrier capex climbed 2 percent in the fourth quarter last year over the same quarter in 2009, marking the first growth in this segment since the fourth quart of 2008 when the financial crisis made its impact, Ovum said.

Walker said: "The late pickup of global capex in 2010 drove the full-year results. There is usually a fourth-quarter budget flush, but 2010 was stronger than 2009 when most carriers remained jittery. Vendors that faced several quarters of lean times are certainly happy to see the capex tap turned on again."

According to Ovum, the Asia-Pacific telecommunications industry, excluding India and China, registered the second best regional capex growth last year with a 4.4 percent increase over 2009.

While the Indian market suffered a 39 percent drop to record the sector's poorest showing in the region, Ovum noted optimism that this market will pick up over the next year. China's telecommunication sector also recorded the lowest capital intensity since 2006, dropping by 19 percent decrease to 26.6 percent.

Most of major global players such as ZTE, Juniper Networks, Ericsson and Nokia Siemens Networks enjoyed healthy year-on-year growth for fourth-quarter 2010. According to the Ovum report, ZTE clocked a year-on-year revenue growth of 40 percent, while Juniper saw its revenue grow by 26 percent. Alcatel-Lucent expanded its revenue by 13 percent year-on-year, Ericsson at 11 percent and Nokia Siemens at 0.5 percent.