Western European mobile service providers cut spending for fiscal Q2

Western Europe’s wireless and mobile services providers have cut their quarterly spending for second fiscal quarter by 19 percent. The cut back in overall spending comes after the lacklustre performance in mobile telecommunications business in the continent.

The aggravated Euro zone economy and debt crisis has affected the telecom business deeper than anyone expected. Mobile phone usage has decreased and new handset sales are at a disappointing low. The likes of Vofafone, Deutsche Telekom and France Telecom have incurred low sales this year as a result of low demand.

Vodafone, France Telecom and T-Mobile (owned by Deutsche Telekom) cut their spending for the second quarter by 19 percent as compared to the same period last year and 3.8 percent compared to previous quarter.

This decision comes in the midst of development of 4G networks by different carriers in the continent. Mobile services carriers are expanding their 3G networks and further developing 4G networks, some upgrading to more advanced LTE. However, the latest development in the spending will certainly hamper their plans and strategies.

“Overall capital expenditure for the region is expected to drop 12% to $14.4 billion for the year,” said ABI analyst Jacke Saunders in a release. “Western European carriers are at different stages in development, which will very likely impact 4G adoption patterns.”

The advancements in wireless networks is high in demand these days as majority of the internet-based companies focus on mobile usage. The likes of Facebook, Amazon and Apple take major chunks of their profits from mobile apps. But these applications depend on faster internet services like 4G LTE.

The building up torrent of internet-dependent apps asks for faster wireless services but the recent cutback puts a major hurdle in the way.

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Posted by Usman Khalid on Sep 27 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.