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UK telcos 2015 growth 4x faster than GDP – report

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UK telcos’ will grow by 11% in 2015, four times the expected 2.6% rate for the country’s GDP, a report by Barclays’ Technology, Media and Telecoms unit claimed.  According to the report, things are looking even better for 2016 with respondents expecting annual growth to reach 13%.

The report, titled Barclays’ Fast Growth Tech Survey, said 65% of respondents are expecting to grow by 10%, 17 % forecast increase between 10-20% and 10% significant growth of over 20%. “These remarkable growth predictions reveal the optimism and drive of the UK’s world-leading telecoms sector,” Sean Duffy, Managing Director and Head of Barclays’ Technology, Media and Telecoms team said.

“The fact that many firms are expecting further growth in 2016 shows that this trend isn’t transient and the UK is a real launch pad for innovative telecoms businesses. Investors are seeing the UK as an international talent magnet and a platform to grow or launch their business for a number of compelling reasons, including the culture, light-touch regulation, supportive Government policies and access to finance.”

Increased competition and the ability to attract and retain talent were identified as the biggest challenges for 2015 with 33% and 19% of respondents choosing these respectively. 53% agreed the government provides sufficient support, while managing cash-flow and increased costs were seen as the biggest concerns (30% and 20% respectively).

In terms of achieving growth in 2014, the report said 83% of respondents saw strong leadership as having been the key. In addition to this, marketing and advertising were highlighted as having an important role for sustaining and accelerating growth. 74% also agreed developing and protecting their IP is critical.

“Strong leadership rang out loud and clear as being critical for growth, and this is particularly important in the first few years of a business’ life,” Duffy said.

“It’s also even more relevant for fast growth businesses, which experience unique stressors and demands on their cash flow, requiring their leaders to make many major decisions at speed in order to keep pace. It takes an extremely strong and dynamic individual to have a clear vision and the energy to lead their workforce to success in this type of supercharged environment.”

The report also found the profiles of the fastest growing small firms with annual turnovers around £3-5 million and growth around 20% and over, differed from those with standard growth of about 10%. Respondents from small, high growth firms generally regarded many suggested attributes for growth higher than those from companies with less growth.

These attributes included strong leadership (93% of high growth, small firms, 73% from slower growth firms), investment in technology (84%, 67%), and speedy decision making processes (80%, 54%). Further, 14% small telcos with high revenue growth said they expect to increase turnovers by 21050% in 2015, compared to just 1% of those with lower growth.


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