Jens Alder, chief executive of Switzerland’s largest telecommunications operator, Swisscom, believes the industry is beginning to emerge from its slump.This content was published on October 14, 2003 - 17:21
He says while new investments are being made, the approach is more cautious than it was during the telecoms boom, which began in the late 1990s.
Attendance at the Telecom World 2003 trade fair in Geneva this week was expected to be half that at the last conference four years ago, reflecting the downturn in the sector since then.
Alder says operators have learnt their lessons from the enthusiastic spending that preceded the downturn.
“The financial bubble of 1999 to 2001 has definitely burst,” he said. “Fortunes were spent on projects that were excessively risky.”
But he says, both the mobile and fixed-line communications sectors are beginning to gather momentum again.
“Investments are slowly starting up again, but this time with more caution.”
Alder says broadband represents the future of both mobile and fixed-line services. With its greater capacity for sending information, broadband allows operators to offer more sophisticated services, such as images and even video.
While fixed-line operators have spent large sums on creating international broadband networks using fibre optic lines, Alder maintains the potential of the medium has not been fully realised.
The development of fixed line broadband has been held back by financial problems incurred as a result of ambitious spending on rolling out the new networks. As a result, many of the sector’s biggest operators have gone under.
“We now know, and were shocked to discover that this enthusiasm was not based on sound economics,” Alder said.
Spurred on by the fervour surrounding mobile broadband services, telecoms operators spent billions on so-called Universal Mobile Telecommunications System (UMTS) licences, amounts that are now considered excessive.
And although many predicted during the boom years that the new mobile system would be widespread by 2002, it has so far failed to compete with the GSM global mobile system, which has more than 70 per cent of the global market.
However, Alder remains convinced that mobile users will be attracted to UMTS services.
“This mobile telephone standard is much more efficient than the old system,” he said.
UMTS mobiles are due to arrive on the Swiss market by the beginning of 2004.
Attendance at this year’s Telecom World – which runs from October 12 to18 - is expected to be 100,000, down from 200,000 people in 1999.
Many of the big telecoms firms, such as Nokia, Siemens and Sunrise have decided not to exhibit this year, although British Telecom, AT&T and Cisco Systems are present.
In addition, some 70 Swiss-based organisations are represented, including Swisscom, Kudelski and the Federal Office of Communications.
swissinfo with agencies
Telecom World takes place in Geneva every four years.
Telecom World 2003 runs from October 12 to 18.
Some 100,000 visitors are expected to come to this year’s event, down from 200,000 in 1999.