Telecoms sector defies downturn

More than half of the industry managers surveyed indicated they have yet to notice any negative effects on their core business.

However, they do expect further declines in demand from customers, thus ruling out the possibility of price wars in the sector.

About 50% say that, despite this, there were ways in which to draw out long-term investments in some areas such as the roll-out of broadband technology and the provision of other key ICT services.

More than 80% of the executives from Africa believe funds will be scarce while 50% say the blocking of capital expenditure liquidity is a "real threat" to the sector growing.

Christoph Klein, a co-author of the study and partner at Detecon, said the majority of respondents in Africa and Europe dismissed any hint of a price war.

"We believe that larger African carriers with strong balance sheets and access to funding will evade really harsh negative impacts."

But he said that many smaller operators in weaker economies in Africa will feel the pinch during the second half of the year.

He said European and African telecommunications service providers must focus on securing customer loyalty and maintaining current sales levels.

Some measures, he said, could include the expansion of available services for the same price.

Fritz Milosevic, co-author of the study and a managing consultant for Detecon in South Africa, said: "While other industries are struggling with market collapses, some of them of historic dimensions, the telecommunications market is proving to be hale and hearty."

Milosevic said, unlike their European counterparts, African executives regarded the current crisis as an opportunity to grow through mergers and acquisitions.

Source: The Times

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