After under-performing the market by more than 50% last year, the Asian telecom sector is set for moderate growth in 2010, analysts say.
IDC expects the Asia-Pacific (ex-Japan) services market will grow 6.0% to $252 billion, driven by mobile and fixed data services.
Nomura International said it was “hard to be excited about Asian telecoms” in 2010, but it expected a better year.
“Relatively, if the broader markets weaken, we expect telcos to outperform; otherwise there is little hope,” said Nomura. “Massive underperformance is also unlikely, in our view, given attractive valuations and strong balance sheets.”
On the upside, it said competition and regulations should be “relatively benign” and carriers’ strong balance sheets “bode well for the M&A theme and capital management.”
IDC said ICT investment would remain “cautious and prudent.” It expects the “telecom, managed services and networking market to show moderate growth in 2010, helped by the revival in the global economy.”
The carrier equipment market would contract 0.8% to $55.7 billion, while enterprise network spending would increase 14.8% to $12.8 billion, thanks mainly to spending on data center networks, forecasts IDC.