Telecommunications sector capital investment is dropping because ...

by the global financial crisis, 2008 revenue grew by only 0.8 percent, and investments fell 1 percent. Other findings included: (1) An estimated further revenue decline of 0.5 percent for 2009. (2) ETNO companies continued to spend an average 12 percent of their revenues on investment and to account for 71 percent of total sector investment. (3) The number of Internet and mobile connections is still growing, but the number of fixed lines decreased by 5 percent over the last year. Europe’s 116 million fixed-line broadband subscriptions have now been surpassed by 3G subscriptions of 124 million. (4) Key European innovation trends include development of interactive applications such as networking sites on fixed and mobile broadband platforms, video and music download offers, and residential and office energy consumption monitoring services. The study says that EU regulators must provide investment incentives by creating a regulatory regime that recognizes the risks of rolling out next-generation access networks, ETNO Director Michael Bartholomew said. Competitive telcos are also unhappy about the regulatory state of the sector. The European Competitive Telecommunications Association’s latest broadband scorecard, published Wednesday, showed broadband uptake is slowing and competition across the 27 EU countries isn’t progressing. The ECTA urged the European Commission to “set a vision for innovation and growth across the information and communication technology sector and to crack down on protectionist governments.” New research shows a strong link between effective economic regulation and investment levels in the telecom sector, ECTA said. Companies are looking for places where they won’t face barriers to entry because of poorly applied rules that favor dominant operators, it said. “Europe has been asleep at the wheel for the last two years” when it comes to competitiveness in broadband services, ECTA Chairman Innocenzo Genna said. The report found that 23.5 percent of Europe had broadband access as of April, up from 20.5 percent in April 2008. But that average number masks large differences among countries, with Nordic states and the Netherlands having among the highest usage rates in the world and other nations having much lower rates, ECTA said. There are also wide differences in fiber penetration, with Sweden on top and little or no fiber deployment in some other countries, it said. Incumbents’ average market share rose slightly in the last six months and remained about 50 percent in 12 countries, ECTA said. Research shows telecom investment is influenced by current gross domestic product levels and a country’s standard of regulation, ECTA said. A 10 percent improvement in the regulatory environment to open markets and boost competition would create a 3-6 percent rise in communications investment, it said.