Private Activity in Telecommunications Recovered in 2010 But Remained Below Pre-Financial Crisis Levels

Abstract

In 2010, eight new telecom projects with private participation reached financial or contractual closure in seven low and middle income countries. These projects involved investment commitments of US$4.2 billion. Telecommunications projects implemented in the 1990-2009 period attracted new investment of US$67 billion, bringing total investment commitments to the sector to US$71.2 billion in 2010. Total investment in the sector grew by 15 percent in 2010 compared with 2009, recovering from the sharp drop in 2009, but remained below the pre-financial crisis levels of 2007-08. The number of new projects reaching financial closure (eight) was the lowest of the entire period of 1990-2010), suggesting that activity in most countries focused on network expansion of existing operators rather than increasing the number of operators. Certainly, telecommunications operators in many developing countries have merged or consolidated in the last few years.