Telecom's Titanic Shift: How the Mighty Have Fallen


For the past few years I have been saying that we are amidst a Titanic shift in the telecom landscape; the center of gravity moving away from the U.S., leading to the rise of new telecom giants which in turn is fueling the rise of upstart equipment makers, such as Huawei and ZTE Corp. A report from research firm Telegeography brought it all back into focus for me. Take a look at the sharp declines in revenue and growth at the mightiest telecom companies in the world.

These 10 saw their quarterly revenues decline by 4 percent year-on-year (again, when measured in their local currencies), with Sprint-Nextel (s S) posting a 12 percent drop. Many of these companies are focused on a single geographic market that is growing slowly and is highly competitive. And now compare this reversal of fortunes with the gains posted by some of the newer players, which are clearly supplanting the giants at the top of the totem pole.

China Mobile, Vodafone (s vod) and America Movil fit into the first camp while China Unicom, Vivendi, China Telecom and Verizon (s vz) are in the latter. All of these companies reported Q1 2009 revenues that were at least 10% higher than their respective Q1 2008 turnover.

Vodafone has benefited from its move to fast-growing markets like India; as we reported earlier, China and India are continuing to grow at a rapid clip. With Indian telecom giant Bharti looking to merge with South African player MTN, there is a good likelihood that we will see the combined company crack the top 10 very soon.