Post Financial Trauma –

Challenges for the

Communications Value Chain
James Enck
Senior Partner
28 October, 2009
 The Legacy
• National budgets
stressed, consumer
traumatized,
enterprise cautious
• $4trn in distressed
debt worldwide,
more to come
• Corporate default
rates 11.5%, high
yield recovery rates
half the 30-year
average (23% vs.
Recovery: Pick a letter, any
letter

Source: SmartMoney.com
 Whenever / however the recovery kicks
in , and whatever it looks like , it ’ s
likely to be slow and tough

The world is not going to be the same

There are huge challenges beyond

those posed by mere economic cycles

The future should find us …

Poorer
 Poorer

Source: Hayman Capital

 Credit-constrained
Private credit growth (annualized change in 3M moving average)
30

25

20

15 France
Germany
10
UK
5 Spain

0
2007M1 2007M7 2008M1 2008M7 2009M1 2009M7
-5

-10

Source: mCAPITAL, from IMF data

 Jobless
Unemployment rates
20
18
16
14
12
10 France
8 Germany
6
4 UK
2 Spain
0

Source: mCAPITAL, from IMF data

 Older
Elderly Dependency Ratios (at constant fertility rates)

Source: mCAPITAL, from UN data

More crowded
Hungrier and thirstier
Colder and darker?
Serious times…
… fo r a se rio u s in d u stry?
 Okay, I’m being a bit
flippant
There are promising developments


around:
– Smart grid
– Green datacenters
– Virtualization
– Telepresence
– Telemedicine


 But the greatest value will be created

in enabling solutions to real
problems. Some of which we haven’t
encountered yet.
Consider electricity
Industry wish list
Awareness

Engagement

Investment

Reorientation
How well-positioned do you
feel?
 Thanks!

james.enck@mcapitalglobal.com
eurotelcoblog.blogspot.com
@jimiinc