The worldwide telecom consulting market grew by 8.6% in 2008, however the economic downturn caught up with the industry in 2009, when the sector’s revenue decreased by as much as 9.1%, as a result of which, 2009 revenue decreased below 2007 levels.

The 2008-2009 recession hit telecom consulting firms more severely than the last recessionary cycle. During the dot-com crisis of 2001-2002, telecom consulting revenue decreased by 6.0% and the recovery in 2003 saw revenue stabilize before returning to growth in 2004.

This time around, as the crisis was more brutal and was extended to almost all industries and regions, the impact on the telecom industry was deeper and we expect the recovery to take longer. It is taking more time for telecom operators to switch from their cost cutting mindset to implementing expansionary strategies. Projects that were initiated in 2007 and 2008 are now completed and it is taking time for customers to turn their focus once more to spending on major consulting assignments.

As 2009 came to a close, the global economy had largely stabilized, and prospects for some kind of recovery were improving. However, we anticipate a subdued recovery, spending for telecom consulting to remain sluggish and for the market to remain intensely competitive. Operators are therefore still very much focused on cutting costs in the face of ongoing pressure on revenues and profitability.

Consequently, the telecom consulting industry is expected to continue to decline by 1.1% in 2010 and to return to a positive revenue growth of 3.4% starting in 2011. ‘Most major telecom consulting firms are continuing to see negative revenue growth year-on-year in the first half of 2010, nevertheless most are turning the corner and are expected to see a more positive picture by the end of the year’ HOT TELECOM’s president Isabelle Paradis said.