TORONTO—Wireless carriers and other telecommunications service providers could face a permanent slump, according to the investment firm UBS Warburg. In a recent report, it said the industry’s incredible growth during the last half of the 1990s may have been an aberration, not the slump that began in late 2000 and has lingered.
The report also said it is possible that the wireless industry could produce new products or services to reignite the telecom sector, but that is unlikely to happen this year. The wireless industry has been particularly disappointing in recent quarters in North America, Europe, Japan and China.
Stuart Isherwood, a telecommunications services analyst at UBS Warburg in Toronto, said the industry has underdeveloped niches, such as wireless data, but the questions remain about the ability to generate profit. “Most people are a lot more conservative on outlook than they were a couple of years ago, but perhaps the market has not yet priced in a no-growth scenario. Maybe we went through a once-in-a-lifetime event,” he said.
