financing. The last 10 years have seen the telecoms market mature
greatly, extending its scope to encompass a growing range of
lucrative, too, as the demand for technology in businesses has
risen. Sales are projected to reach a peak of £9.4 billion (€10.6
billion) in the UK in 2012, according to market research
consultancy MBD. Yet many lessors are struggling with how to
finance the new technology.
“Finance companies are asking themselves many
questions: ‘How can I finance voice-over-IP (VoIP)? Do I call it a
server? How can I define telecoms equipment?’” said Jennifer Koppy,
research manager at IDC’s technology valuation service. “The truth
is that we’re seeing blended product areas, with equipment no
longer made for specific purpose or use.”
John Flounders, sales director at Shire
Leasing, has experienced this first-hand: “Funders are less willing
to fund certain products, for example VoIP products, and this is
having a negative effect on dealers, making life a lot harder for
them to get business placed through brokers like ourselves.”
Despite the economic downturn, technology
manufacturers continue to develop and innovate products, especially
in the unified communications arena. Unified communications refers
to the simplification and integration of the many modes of
communication – for example, receiving a voice mail and then,
having been converted to text automatically, being able to read it
in your inbox.
The industry is seeing a marked slowdown in
demand, however, as businesses put telecom projects on hold.
“Lessors need to expect things to happen more
slowly,” said Koppy. “With the downturn, many customers will hunker
down and retreat from investing in a new telecoms
Flounders, however, disagrees strongly. “There
is still plenty of business out there – the difficulty is getting
the funders to accept the business,” he said. “A tightening of
underwriting has happened throughout the marketplace.”
However, it is likely that the market will
continue to appeal to lessors on the look-out for new growth areas.
Although IDC projects that the telecoms equipment market will
decline by around 1 percent globally this year, lessors can expect
“very moderate” growth in 2010, followed by up to 5 percent in 2011
and 7.5 percent in 2012.
“There are always going to be customers and
suppliers out there, selling volumes of equipment,” said
He believes that with lessors introducing
lease calculation sheets, there will be more transparency about
what customers are buying.