SHENZHEN, CHINA 27 AUGUST 2010- The average top-line revenues for the leading Asian telecoms declined for the first time in 2009 by 0.8 per cent, according to Ovum, a provider of consulting and advisory services.
Ovum's new report, Asia-Pacific's Telecoms Overview, identifies price declines, tough macroeconomic conditions and market saturation as being behind the slump.
Nicole McCormick, senior analyst, noted that macroeconomic factors combined with the slowdown in broadband and mobile growth, as well as a decline in fixed voice services, all significantly impacted performance, making 2009 financially tough for the industry.
However, despite this decline, firms were able to improve earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins slightly, thanks to cost optimisation and operational efficiency initiatives.
McCormick said significant focus was put on these programmes in 2009 during the peak of the crisis, which brought about a reduction of one per cent in the industry's average operational expenditures.
Tough times ahead
Ovum predicts continued tough times in the next few years for the industry. It sees mobile voice revenues peaking in 2012 and declining to US$176.8 billion by the end of 2015 due to the commoditisation of voice, even though overall voice and data revenues are seen to increase from US$267.1 billion in 2010 to US$310.6 billion in 2015.
Mobile revenue growth is seen to increase by a scant 1.3 per cent in 2015 compared with the 2 per cent growth experienced by the industry in 2009. McCormick says data revenues will continue to compensate for declining voice revenues, but by 2015 the Asia-Pacific market is predicted to have 3.84 billion mobile connections, or 96 per cent penetration.
Ovum recommends that operators craft new growth drivers and business models to compensate for the market's sluggish performance. Common areas being explored for possible future investment include IT services, international investments, entertainment such as video, and initiatives to monetise broadband access. That said, the company does not see such initiatives as becoming significant contributors to revenue for the time being; existing voice and data services are still expected to provide the bulk of revenue share for some time into the future.
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