MEDIUM RISK for entreprises
What to Watch?
The information and communication technology sector (ICT), comprising a wide range of activities from electronic components to telecommunication services, will continue to enjoy dynamic growth. We expect sector revenues to increase by +4.4% in 2018 (vs +4.3% in 2017).
In 2018, there will be three main drivers of revenue growth of ICT sector companies. First, the Internet of Things (IoT) and the development of 5G networks will drive growth for the telecommunications industry in 2018. All major telecom companies in the world are now setting targets for the 5G network deployment in 2018. Second, blockchain technology is expected to go mainstream and get a major share of IT budgets of companies working in a vast range of fields ranging from finance to healthcare. Furthermore, artificial intelligence (AI) is expected to be a part of almost every new IT product launch in 2018, even though in many cases this is a marketing exercise for a newer more sophisticated version of the current product. As always the risk in the sector lies within the cash flow statement, particularly during phases of new technology adoption, and companies’ liquidity should continue to be carefully monitored.
Network equipment: Highly competitive market with sustained expected growth. Network equipment is required to support widespread adoption of technological advancements related to big data and cloud computing
Services: Huge demand spurred by the digitalization of the economy, yet suffering from price pressures
These assessments are, as always, subject to the disclaimer provided below.
This material is published by Euler Hermes SA, a Company of Allianz, for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by Euler Hermes and Euler Hermes makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of the Euler Hermes Economics Department, as of this date and are subject to change without notice. Euler Hermes SA is authorised and regulated by the Financial Markets Authority of France.
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