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November 13, 2009

Leading Global Service Providers Grew Revenue About 1 Percent Sequentially in 3rd Quarter

By Gary Kim, Contributing Editor

Most global communications service providers reported third-quarter 2009 revenue growth, year over year, at about the two percent rate. But a few wildly exceeded that performance. Verizon (News - Alert) managed to produce revenue growth of 10 percent while Vodafone grew revenue more than nine percent.
China Mobile grew revenue more than eight percent, while Deutsche Telekom (News - Alert) grew revenue about five percent, on an annualized basis.
Others had negative annual revenue growth. Among them, KDDI saw its revenue decline about one percent. AT&T (News - Alert) saw a decline of about 1.75 percent. NTT dropped about three percent. France Telecom and Telecom Italia declined more than six percent.
Sequential growth was a bit worse than annualized performance. Quarter-on-quarter growth came in at just under one percent, on average, but acquisitions fueled much of that "growth."
Western Europe is the region where competition and recession have proven most difficult, TeleGeography says. While the Japanese and US markets are also struggling, the drop-off in revenue has not been as marked as in Western Europe.
Over the last year strongest organic growth among the top 30 global service providers was achieved by MTN, America Movil, Carso Global/Telmex, China Mobile and SingTel (News - Alert), TeleGeography says.
But currency effects could well be distorting the overall picture. Global service provider topped $300 billion for the quarter. But the U.S. dollar exchange rate for the Euro, Yen and Pound declined between four percent and six percent from the second quarter to the third quarter. That adds about four to six percentage points to revenue when reported in U.S. dollars, rather than local currency.
TeleGeography expects a period of increased consumer price sensitivity and price competition as the global economy recovers.
‘But there are some positive signs," says TeleGeography analyst John Dinsdale. "Underlying subscriber growth is still reasonably strong in most markets, and you can see many service providers trying to compete on factors other than price."
"Revenues did grow by one percent relative to the previous quarter, and while that is lower than the relative figure from 2008 it does show that there is some positive momentum," says Dinsdale.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Stefania Viscusi

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