There are three main causes for the current crisis in the telecommunication and information technology sector. The first one: a usual phenomenon of slowdown in demand.
The current crisis of the telecommunication and information technology sector results of a common phenomenon of slowdown on the market, reinforced by two heavy financial events; this crisis relates back on the overall of the two sectors in a disproportional way; it creates the conditions of a technologic break which is worrying for big European countries and more particularly for France and in the sector of the broadband Internet.
A usual phenomenon of slowdown in demand
1-The saturation of the market
It is absolutely normal that these two sectors, which have registered a continuous growth for more than a quarter of a century face a stabilization of the demand. On this stage, telecommunications and information technology are entering, for a part of their activity, in a phase of maturity, as in any other sector.
However, we can note that we are more faced to a slowdown than to a real stabilization: if the personal computer sales are stable, the personal assistants sales are soaring and despite the crisis, more mobile phones were sold in France on the first quarter 2001 compared to the first quarter 2000.
The slowdown in demand also has to be analysed regarding the optimistic forecasts of the ones and the others, which have ended to situations of overcapacity for which the sanction leads to lay-off schemes on the overall of the two sectors of information technology and telecommunications.
2- A double stage of uses
If you look at them precisely, the rounding of the curves of computer, software, servers, or mobile phone sales, depend on more complex causes than a simple adjustment crisis of the offer to the demand.
If this fact is the consequence of a trend, which would be common, of a weakening state of the demand and of the overcapacity of the offer, it also proceeds of a double stage of uses.
Uses and services of basic computer and telecommunication equipments have gradually become common, as the phone or the television did. Users, either professionals or individuals limit themselves to a normal rate of renewal of their equipment, and more often to access to functionalities (access to the web, e-mail, company networks, mobile telephony, etc.) which are offered on the market since quite long ago. Even if the corresponding demand faces progression rates which would content other sectors of activity, it isn’t enough anymore to make the sector as dynamic as before.
On the contrary, the new services and many other equipments linked to the introduction of the broadband Internet, mobile or not, are not totally available yet. In the first case, because of the unbundling of the local loop, and in the second case, because of the delay of the development of equipments and networks. The offer of services being delayed, it is perfectly understandable that the appropriation of their use, which controls the purchases behaviours are not following.
The problem was that it consisted in spreading as much as possible the results of a first technologic revolution, while preparing, at important costs in research and development, the introduction of the second one. However, we could estimate that the benefits of the first technologic revolution could be used for the investment of the other.
In 2000, two financial events have disturbed this reasonable anticipation, however not acquired: the bursting of the American stock-market bubble and the conditions of the granting of third generation mobile telephony licences in the main European countries.