The telecommunications industry has escaped the worst of the global economic downturn but a lack of funding is slowing the rollout of next-generation mobile networks, a U.N. report said Monday.
Governments should consider investing some of their stimulus funds in cell phone networks, fiber-optic connections and broadband infrastructure as part of an effort to boost the wider economy, the International Telecommunication Union said in a 90-page report.
The financial crisis has “cut directly across many operators’ investment plans to upgrade existing networks and roll out various next-generation networks,” the ITU said.
Telecoms companies are also struggling with the long-running problem of regulatory uncertainty because governments are slow to approve technical innovations for widespread use. At a time of funding shortages, this means companies have become even more cautious about investing in new technology, the report said.
On the positive side, over two-thirds of governments have approved or tolerate the use of voice-over-IP technology, which allows calls to be made over the Internet and has drastically cut into the revenue streams of some state-owned monopolists, ITU said.
The report was published at the start of a weeklong telecoms industry event hosted by ITU in Geneva. Many of the world’s major telecoms companies — including Nortel, Ericsson and Siemens — are staying away from this year’s event, citing tightened budgets.