NEW YORK-Lessons learned during the past three years have brought a sense of reality to the telecommunications industry, according to the newly released “Deloitte Telco Index,” which examines the worldwide telecom industry from Jan. 2000 to July 2003.
The report examines the boom in the industry and the subsequent downturn. Deloitte believes the upturn was fuelled by the introduction of the public Internet, the maturation of mobile-phone technologies and widespread regulatory reforms intended to increase competition. Uncertainty surrounding those intertwined factors eventually led to the segment’s crash.
Deloitte noted several ongoing threats to the recovery of the sector: a surplus of fiber-optic cable, growing competition, unsettled regulatory policies, high debt, unsecured financing of equipment, bandwidth pricing struggles, accounting issues, the use of cable TV networks for telecommunications purposes, and the substitution of wireless for wireline phone service.
The report also examines the telecom industry by region. China “is the most tantalizing market on the globe,” according to Deloitte’s research. The country counts 250 million subscribers, but considering its population of 1.3 billion people, still has enormous potential, especially given consumer interest in wireless technologies. Its fixed-line penetration rates are just 3 percent and wireless penetration is just 16 percent.
