Telco finance chief to industry: Forget growth

Telekom Austria's finance chief has said European telecom operators must realize they are no longer in a growth business. Hans Tschuden, the operator's CFO, says growth still exists in emerging markets but no longer in Europe.

Tschuden includes Eastern Europe in his no-growth model, as well as Western Europe.  Both have taken a hard knock during the current recession, although Tschuden's comments point to a longer term trend. "Several markets such as India continue to grow. But in all of Europe, including the East this phase is over with a few exceptions," he said.

A flat market caused by universal penetration has been a constant theme in Western European mobile markets in recent years. Mobile data services offer some enlivenment. The no-, or slow-growth story has been exacerbated by a dire economy. Some analysts argued at the start of the recession that the telecoms industry would represent a safe haven compared to other sectors. Recent financial results have undermined this view.

The current crop of quarterly results have seen declines in profits and/or revenues from leading European telecoms operators. Central and Eastern Europe contributes about one third of Telekom Austria's business. The company is reporting its first quarter results on May 12. The company admits 2010 will be a tough year. It expects Ebitda to fall 11 per cent compared to 2009.

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