European Communications

Last update12:49:27 PM

'Good' year for telecoms industry

A new report has hailed 2011 as a good year for the telecoms industry.

Figures show that service provider capital expenditures (capex) jumped by an estimated 12 percent compared with 2010 to hit €238 billion.

And the report by Ovum also revealed that revenues hit €1,488 billion in 2011 - a rise of seven percent.

However, the report warned that revenue growth will not be as great over the next five years. It predicted a compound annual growth rate (CAGR) of 2.9 percent over the 2010-2017 period, which is significantly less than the 6.3 percent rate achieved between 2004 and 2010.

The report also predicted that the capex CAGR would by reduced by half compared with the 2004-2010 period, slowing to around 3.1 percent in 2010-2017.

Hailing the sector's performance in 2011, Ovum principal analyst Matt Walker said it represented "a good bounce-back for the industry", but he warned that as macroeconomic weaknesses will limit revenue growth, service providers will target their cost structures.