The telecoms industry may have shown resilience during the recession, but the focus on driving efficiencies and cutting costs looks set to continue, and there is "no quick fix", according to a new report from Ovum.

The report adds that although the economic downturn has not resulted in the downward pressure on telco top lines that many expected, revenue growth is in decline for many mature market operators, and is slowing for those in emerging markets.  “While the recession accelerated revenue decline, challenges such as market saturation, increased competition and regulatory intervention on roaming and termination rates won’t disappear just because the economy picks up”, said Clare McCarthy, Principal Analyst at Ovum.

User spending is believed to have been fairly resilient during the economic downturn, reflecting the fact that for many customers, telecoms services are now longer expendable. 

In a recent global survey by Datamonitor, parent company of Ovum, only 7.6% of respondents indicated that they would definitely cut back on spending, though over a quarter of consumers surveyed said that they either would, or consider cutting back on their telecoms spending, with a further 24% undecided.  When asked which service they would look to cut back on, over 30% indicated that they would consider downsizing their mobile phone tariff, while 24% saw fixed voice as an area there they could make cuts.

Telcos have been busy responding to the situation with cost-saving measures, cutting Opex and Capex, accelerating employee release programmes, and stockpiling cash.  As a result, many telcos are believed to be emerging from the downturn with healthier balance sheets than when they entered, as well as significant cash balances.  Ovum states that those which prudently managed their finances during the downturn will grow, but should be wary of merger and acquisition programmes designed solely to grow top-line revenues.

“We expect activity, partnerships and possible acquisitions to occur, with telcos looking at over-the-top (OTT) services for consumers, as well as developing vertical expertise in ICT provision for enterprises,” said Mark Giles, Analyst at Ovum.