Enterprise Funding in UK Telecoms Sees Sharp Fall in Q3 2020
A new study by the tax consultancy firm Catax, which analyzed the latest data from the Office for National Statistics (ONS), found that corporate investments in the UK telecommunications sector fell for the fifth consecutive year, falling 9.2% in the third quarter of 2020 alone. have decreased.
Business investment in the industry declined £ 355 million between Q2 and Q3 2020, dropping to £ 3.5 billion as the global pandemic continued to hamper economic activity. This represents a 41.8% (£ 2.5bn) year-over-year decline from just over £ 6bn in Q3 2019, which is said to be significantly worse than overall UK industry performance.
By comparison, total business investment in the UK across all sectors fell 19.2% annually in the third quarter of last year. However, UK quarterly GDP grew 15.5% in the third quarter, though that pace of growth slowed later in the year and only saw a 1% increase in the fourth quarter. The result was that the UK’s GDP contracted 9.9% overall in 2020 – the worst performance since modern records began.
Mark Tighe, CEO of Catax, told ISPreview.co.uk:
“The telecommunications sector is really suffering from the problems caused by the pandemic, which would have pushed many companies into the background to weather the storm and maintain cash flow.
The industry is underperforming the UK economy as a whole, and other sectors saw a much stronger rebound in the third quarter of last year, so it has a lot of catching up to do.
Now that the pandemic slips into this stubborn decline, it has to be assumed that the situation is unlikely to improve as the country continues to be subjected to repeated lockdowns. However, the current vaccination campaign should allow the UK to unleash its covid shackles soon and this will hopefully give telecom, information and communications companies a chance to recover. “
We’ll watch closely how things change over the course of 2021 as vaccine adoption in the UK grows. However, it is worth bearing in mind that evil mutations in COVID-19 still have the potential to disrupt all of this, and so does potential mismanagement of the pandemic by the UK and other world governments. Likewise, it will likely be Q3 or Q4 2021 before we see the outcome of a positive result.
