The Crisis As A Catalyst For Telecommunications

Necessary market consolidation accelerates Dusseldorf, February 28, 2009 – the capital market financing conditions have worsened significantly in recent months also for the telecommunications industry. \”This judgment was Uwe Burkert of the Landesbank Baden-Wurttemberg, the specializes in the Euroforum annual Conference telecom trends\” on the impact of the financial crisis for the credit rating of the company expressed in Dusseldorf. The short-term commercial paper market was limited as an alternative source of funding and new issues of corporate bonds have been stalled. \”The financing options of the company are our opinion currently exclusively by the motto of cash is King’ driven ‘, as Barbour. The uncertainty in the markets should determine with the financing prospects for the company according to the Bank Manager also in the next few months, what will increase the funding for the company due to the significantly higher spreads for corporate bonds. At this point, companies with a medium-sized entrepreneurial culture, who heavily rely on equity capital, are clearly at an advantage. You can now play out their strengths.

A still very competitive rates are available for companies, on the other hand, the financing issues block not the management\”industry insider explains Andreas Lady, Germany Chief of the TK group Aastra. His company continuously have a positive Cash Flow for more than ten years. Despite large acquisitions, we can concentrate fully on the operative business and at the same time take advantage of the opportunities, resulting in the current situation\”, says Lady. According to market analysis of the consulting firm Booz & co. will the recession be a catalyst for the necessary consolidation and structural adjustment of the industry. Only by acquisitions, mergers and collaborations, economies of scale still can be achieved for the network operators. At the same time allow new network operating models such as outsourcing, Booz & co. performs network sharing or the integration of fixed and mobile network operation significant cost reductions\”.

Traffic Limit

It’s been almost 3 years that the UMTS successor to LTE in Germany in operation went. With significantly increased bandwidth, mobile communications technology should change the existing market and set new standards in the use of mobile. Although the technology certainly represents progress, the breakthrough was largely. Little added value for consumers, the main reason may be the low-LTE coverage, because away from the big cities, there are unlikely to be able to take advantage of the promised potential actually. For consumers, however, the LTE technology is availability with additional costs without a significant added value is given. In addition to more expensive contracts, a modern device which is able to take advantage of the new standard is required. And even, if all costs are covered, there is little difference to the older UMTS reflected in practice.

No wonder because the operators act on the market so useful supply of agglomerations from an economic perspective may also look, speaks to the reality another language. Thanks to almost hardly a demand nationwide supply through Wi-Fi hotspots in major cities, especially as the technology lags so far behind the expectations. As already in UMTS, the available bandwidth is divided among all users, so under real-world conditions, the speed drops below the level of its predecessor. A question of policy represents the crazy Tarifpolitk of the mobile service provider another problem, which increasingly includes a clause of the throttle at high speed access. In practice, this means that the user can use the paid speed only up to a limit set by the provider and then is further linked to worse conditions. These limits are often so low, that is the practical benefit – a problem that was already creating the predecessor to UMTS.

Theoretically, LTE would have the potential to persuade through higher bandwidth and to develop applications that could be realized only with fast DSL connections. It would be however the outdated structures necessary to drop and to remodel existing tariffs. A traffic limit cripples the user and obscures the benefits of development. Currently, it gives the impression as if the industry were in an endless cycle, repeated the mistakes of the past to the new. Although a coverage for households in the countryside without DSL connection could provide wireless technologies, the metropolitan areas are supplied with regard to the potentially larger number of customers. The bandwidth is suffering again and with it consumer. Once in a few years eliminated the most serious problems and the supply is ensured as far as possible, the next standard appears and the development starts from scratch.