UK shines in European IT and communications market

IT growth outpaces telecoms in generally sluggish market

The European market for IT, telecommunications and digital consumer electronics (ICT) is expected to increase by only 3% by the end of 2008 according to forecasts by the European Information Technology Observatory (EITO).

Such growth would amount to a market worth 761 billion Euro in 2008. Despite the seemingly low growth rate, the EITO expressed confidence in the market. “The high-tech industry is again achieving a considerable plus on an already high level”, asserted EITO chair Bruno Lamborghini. “Based on solid growth in the European market and their enormous potential in know-how, European companies are well positioned to excel in global competition.”

In terms of technology breakdown, IT is outstripping telecoms. The IT market across Europe is currently growing by 4.3 percent, to 313 billion Euro, according to EITO. IT services (5.7%) and software (5.2%) are driving the market with, in IT services, the outsourcing market, with 7.4%, is showing the greatest plus. EITO expects the growth in IT to continue in 2009, the market expanding by 4.4% across the EU to generate 326 billion Euro of revenues.

In contrast, EITO estimates that the telecoms market is growing by only 2%, worth 386 billion Euro. Even though the market showed turnover for fixed-voice telephony falling, there are indications of strong growth in fixed and mobile data services. “Fast broadband connections are indispensable not only for businesses – the majority of private customers also wants to be able to exploit all the possibilities of the Internet with high transfer rates”, said EITO chair Lamborghini. For 2009, EITO is expecting a similarly sluggish growth of 1.8% in the telecommunication sector to amass 393 billion Euro.

Of the major European markets, Spain , with 4.6%, and France, with 3.2%, showed the strongest growth. In terms of revenue though, the UK led the European states with an ICT market worth 152 billion Euro, just ahead of Germany which generated 145 billion Euro. The next largest country, France , was some distance away with 113 billion Euro.

“This is due in particular to the fact that British undertakings have by far the largest investments in the EU in IT outsourcing”, explained Lamborghini. “Similar activities in other countries are often still carried out within companies, and consequently do not appear in the market statistics.”

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