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Topic : Is Telecom Industry Recession Proof?
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Industry : Telecom/ISP
Functional Area : Recession
Activity: Question posted: 03 13 2009 10:21:26 +0000, 7 answers, 351 views, last activity 07 06 2010 20:18:08 +0000
 
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Are there job losses happening in telecom sector due to recession ?

Are we going to see more lay off in telecom industry ?

 
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Fast growth in Telecom and increase in business volume happened due to cost to the user going down both in terms of handsets, rentals, and  call charges. The Mobile business had already peaked in the cities. More growth at a faster pace is possible if the telecom penetration in Rural area improves. Unfortunately, rural telecom has not grown in the way it should have been.

There are other reasons also in the slow down of telecom industry.

1. Reduced spending with so-called recession due to correction of the misappropriations of global economy by the greedy industrialists happening across the globe. 

2. Internet over phone lines has large business potential but the companies are not bringing down the rentals charge for Internet. As the end subscriber's line which is the most expensive part is being shared, the internet charge should be much less than the telephone rental.

3. As saturation is seen in the basic products, service providers are aiming for megabit data speed products which will negatively affect  business volume due to high CAPEX/OPEX and high cost to users. 

4. Service providers and vendors are trying hard to sell mega bit rate products and mobile terminals which are neither marketable nor needed by the user in the mobile scenario. User's data needs could be satisfactorily met with an assured  data speed of 384 kbps in the down link. This would be enough for streaming of  Video + Audio in real time basis.  Even the 3G hot spots being set up are going to be expensive and hence cannot bring in enough business volume. These facts are taking the mobile business back to 2000 - 2002 era. 

Realization of the fact is likely to bring some reduction in staff working on the so called advanced technology projects, finding it easy to camouflage these by using Recession as a scapegoat.  

5. Wired and wireless phones are now an essential part of rich and poor and therefore, is always a growing business provided the stake holder s in the business and authorities do not kill it.   To give impetus to rural telecom, it is necessary to implement systems and networks sharing to reduce investment cost and thereby reduction of cost to users. 

Abraham Paul. MD. FCOMNET UAE & Future Groups India.

Ex: V.P. Tech. Sales, SPCNL SIEMENS ICN , India / G.M. & SMT-TBG BPL Mobile Netorks, India / Telecom Engg. Services, DOT India.



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by   P. Abraham Paul, MD FCOMNET  | 03 26 2009 08:36:29 +0000
  Answered by     Shyamal Maity, Sales/BD Manager, AT&T  | 03 26 2009 05:06:27 +0000
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First of all let me tell you that the impact of the current global economic recession would be comparatively less on Indian telecom sector due to the inherent strength and faster anticipated growth in this sector. Indian telecom sector has a unique distinction of being the fastest growing telecom sector in the world with addition of over eight million subscribers per month and the second largest wireless network in the world after China with over 315 mobile connections. To a certain extent there are people who are being laid-off but that is not due to recession but because of their inefficiency.so Indian telecom industry is somewhat recession proof. what is your opinion regarding this?



  Answer modified by     Priyank , Network Planning Engineer, COLT Technology Services India  | 03 25 2009 17:44:46 +0000
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First of all indian telcos were never in recession...due to current penentration on a lower side... the question may be: due to economic downturn in other industries, are / will there be some job losses taking place in telecom industry as well....my answer will be yes. If we take the perspective of a capitalist businessman, he will try to make out every opportunity that increase efficiencies in his enterprise, that  includes some job cuts here n there thus taking advantage of a downturn.

But internationally, if we notice...the situation is not that sound...big customers around the world have reduced their consumption....consequently the order book of the major established telcos has gone down as well...this is resulting in lesser work...so lesser requirements...and consequently more job losses. BT, Telecom Italia are some good examples.

Though there may be some other new n unique reasons as well...like... the IP NGN adopted now a days on core network is helping companies to save some huge CAPEX and OPEX, the companies quick to adopt te same must be seeing some good profits by now...also due to this type of infrastructure, the manpower requirements go down...this may...result in some more cuts as well in future.

So to conclude, Indian companies may cut some jobs....it may be result of a particular mgmt. perspective... there are going to be different reasons of layoffs in international companies....recession is one of them.

  Answered by     Ikhtiar Sobhan, Marketing Manager, Orascom Telecom Bangladesh Limited  | 03 25 2009 09:38:27 +0000
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There are no major job cuts at operators, only some job losses for contractual employees.

 

However, there are some straight job cuts at vendors like Ericsson, Motorola etc. They are affected more as operators are not going for new expansion. They are simply continuing their old contracts.

  Answered by     Reetesh Gupta, Sr. Software Engineer, Sonus Networks  | 03 18 2009 14:35:56 +0000
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There are job losses happening in telecom sector. May be we can say that Telcos in INDIA are not affected,

but there are a few small companies (domestic & MNCs) working on some telecom applications development

 and VAS etc.  who had laid off employees. Taking this issue on a broader picture, there are even some

Telcos also of different countries who are laying off the employees for cost cutting.  

  Answered by     Radha Sundaram, Sales/BD Manager, Bharti Airtel  | 03 13 2009 11:17:28 +0000
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I haven't heard any news about job losses in the telecom sector, as telecom is more of a recession proof sector, but surely new initiatives that were ready to be implemented have been stopped due to recession, but there is no job losses as such.....

 
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