Telecoms confidence rises

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Confidence in the telecoms sector is on the rise, according to a report released this week by Ovum.

A report from the analyst firm said that financial activity in telecoms throughout the second quarter has given new hope to the industry during tough economic times.

“We are starting to see more big, complex deals," said Matt Walker, principal analyst for Ovum and author of the report. "In late 2008, the financial market’s volatility killed interest in such transactions.”

Although merger and acquisition deals were down from 391 in 2008 to 315 this year, the value of the deals was $35 billion (£21 billion), twice the average that was achieved in the three previous quarters.

The report also said widespread government intervention helped keep the industry afloat, citing funding of broadband infrastructure, the licensing of wireless spectrum and, in Nortel’s case, a loan.

Vendors have also lent a helping hand, with industry giant Cisco lending $2.1 billion of its capital to customer and channel partners in short and long term loans.

The report concluded: “While the outlook remains cloudy, steps taken in [the second quarter of 2009] by vendors, governments, and private financiers to compensate for weakness in the macro economy and public equity markets bode well for the remainder of the year in telecoms.”

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