MANILA, Philippines – The telecommunications industry is surviving the global financial crisis, thanks to growing demand for broadband leading to investments from both the government and private sector, according to an International Telecommunications Union (ITU) report.
he global financial crisis has not poked a hole in the global information technology sector, with some companies, particularly telecommunications firms, looking at alternative methods to implement better IT and communications infrastructures.
The report, entitled “Entitled Confronting the Crisis: ICT Stimulus Plans for Economic Growth,” commissioned by the ITU, outlined some of the activities of telecommunications companies worldwide on how they managed during the economic crisis, especially as banks scrimped on providing additional credits only to the more financially stable firms.
The report was released at the ongoing ITU Telecom World 2009 in Geneva, Switzerland.
Citing studies, the report noted delayed investments in broadband infrastructure or next generation networks (NGN) could affect businesses that rely on fast telecommunication infrastructure.
The report noted that some governments have opted to subsidize some of the implementation of broadband networks in an effort to stem the damage caused by the global economic crunch.
Some of these governments that opted to subsidize include Greece and Italy. Some telecommunications firms also explored vendor-financing deals in building their NGN infrastructure.
Another study cited by the report is from research firm Nemertes, which points out that global demand for broadband by 2012 would exceed current network capacity.
Global investments to keep up with the demand could be around $137 billion in the next five years. An investment shortfall could affect such implementations.
WiMAX slowdown
While global businesses see a need to have broadband access, the ITU report showed that consumer demand has not been fully tested especially during recession. In particular, more developed countries have established consumer demand for broadband access while consumers from developing countries still see it more as luxury.
Still, the ITU report stated that the economic crisis is pushing demand more on the mobile telephony side than on fixed line. Emerging markets like China and India are leading in this sector.
There may be a slowdown in the implementation of WiMAX (Worldwide Interoperability for Microwave Access), despite aggressive advocacy by several IT equipment providers such as Intel, Nokia Siemens and Qualcomm.
A study by Infonetics late last year pointed out that decreasing demand for ultramobile computers as well as reduction in investments on WiMAX could hamper deployment within the year, but not necessarily shakeout the industry.
The Infonetics study noted that revenue growth for existing WiMAX deployments could return in 2010.
ITU Secretary-General Hamaduon Toure said in a statement that the organization believes that IT investments especially on broadband networks would be vital in helping recover the global economic crisis, adding that the report should help in providing a better perspective as to the global trends in IT and telecommunications investments.
As reflected by Toure, the ITU report said that previous downturns create opportunities for disruptive technologies and new IT companies to enter, which led to economic gains.
“Governments, regulators and industry players convening at ITU Telecom World 2009 will be considering the implications of this report as they formulate strategies to set nations not only on the road to economic recovery, but on a high-tech path to inclusive social development – at incredible benefit to future generations,” Toure said.
