Telecom Industry warns of more hard times ahead

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The telecom industry is moving through hard times with revenue projected as low as 2% compared with other industry sectors. High infrastructure costs, tight regulations, and decline in revenue have failed to woo the investors. According to Simon Holden of Goldman Sachs International, even though the telecom stocks have been resilient during harsh times, the valuation of telecom stocks remained the same.

According to the analyst firm Booz & Company, early 2009, India added approximately 142 million new Internet subscribers, while China and US added 87.4 million and 14 million new subscribers respectively. Experts comment that the industry faces poor revenue projections. It is the lowest compared with any other sector.

Mr Holden observes that it is mainly due to the competitive environment. Regional telecom chiefs also acknowledge the fact that in the near future the infrastructure costs would exceed the earnings per user.

However, companies can tap under-served regions like Syria for broadband and mobile data services for growth. Other strategies such as mergers and acquisitions (M&A) or any other forms of consolidation within the telecom industry could also help industry players remain profitable. Better use of customer data and active collaboration among regional operators will negate the high infrastructure costs.

Research shows an unprecedented demand for digital lifestyle products in UAE. The companies have huge growth opportunities in this area. With more cutting-edge innovations, the companies can open up newer avenues for marketing.

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