Networks “beating the recession”

Mobile networks are “comfortably and steadily” beating the recession, according to a report from telecoms analysts Ovum.

Ovum’s report, titled ‘Mobile operators in a recession: lessons and coping strategies,’ has tracked the performance of mobile networks across all regions in the world for 2008.

The report found that overall, networks maintained revenue and customer growth during the period, but the rate of growth is down.

While most networks in emerging markets are yet to see any significant pressures on their performance, networks in countries such as the US and across Europe, where the recession has had dramatic impact, networks’ revenues are holding out. Ovum has suggested that it is not about immunity from the recession, but rather, adaptability to the downturn.

Ovum senior analyst and report lead author Emeka Obiodu said: “It is comforting that mobile operators have shown remarkable resilience, Whereas other industries have gone to the government with their begging bowls, mobile networks are actually pledging to invest billions to roll out a new high speed mobile network. In fact, after scouring the world, we are yet to find any mobile network that is calamitously struggling solely because of the recession.”
 
Obiodu said currency fluctuations are reducing networks’ revenue, but the threat to the number of revenue generating customers has yet to materialise as networks were generally still growing and adding customers; and networks had taken steps to avoid drastic impact from customers reducing their spend.

The report warns that going forward, mobile networks must worry about competition and regulation, as these are the main challenges facing them.

“It is no use bickering about the recession when rivals are positioning themselves to outsmart you. Neither is it savvy to fret about the fall in roaming revenues from business travellers when the EU can force roaming prices down easily,” said Obiodu. “On many occasions where an operator has complained about the recession, it is possible to show a corresponding non-recessionary force at play.”

However, Obiodu warned that the recession will force a change in future direction for operators. “While the short term impact is limited, the recession will ultimately engineer a paradigm shift in strategic thinking across the industry. On the ground, the basics of the industry will surely remain the same, but the approach to service delivery will eventually change.”