Majority of MENA Telcos Not Affected by Economic Downturn - So Far

While the financial crisis is darkening the mood of business forecasters around the world, the telecommunications industry in the Middle East and Northern Africa (MENA) shows little inclination to be pessimistic, according to the results of a recent study from the consulting company Detecon International. More than one-third of the industry managers surveyed have yet to notice any negative effects on their core business.

Around 60 percent of the respondents in the survey do not expect any large-scale declines in demand among end customers and rule out the possibility of price wars in this segment as well. At the same time, the general economic environment is having fallout in the telecommunications industry when the question of saving money comes up. Exactly half of the respondents in the study, which was conducted in all of Europe and the MENA region, see ways to draw out long-term investments in some areas, an opportunity the companies want to exploit for the improvement of their own financial position.

The study also highlighted that some two-thirds of the MENA quorum regard the lack of liquidity as a problem in their main operating market, and some 50 percent see capital expenditure (CAPEX) liquidity bottlenecks as a real threat to maintaining a course of growth.

"The majority of the respondents, both in MENA and Europe, dismiss a price war threat," says Carsten Schroeder, author of the study and Managing Partner Corporate Finance at Detecon. "So we believe that MENA carriers will evade really harsh negative impacts," notes Schroeder. "The situation in the business customer segment displays stability, although the possibility that companies will reconsider or postpone larger investments cannot be excluded."

The study, "Impact of the Financial Crisis on the European Telecommunications Industry", is available for downloading free of charge at http://www.detecon.com/financialcrisis/en

Additional results of the special MENA survey are available for downloading free of charge at http://www.detecon.com/financialcrisis/mena (both require registration).

Posted to the site on 28th April 2009