Statistics in focus
Industry, trade and services
Author: Guy VEKEMAN
38/2008
EUROPEAN COMMISSION
The telecom sector in the EU
The telecom services sector is a fast growinghigh-technology services sector, with high in-novation and considerable investments, andproductivity and profitability often significantlyabove the average for the non-financial busi-ness economy. This publication analyses thestructure, performance and evolution of thesector, as well as the size of the related activityof telecom equipment manufacturing.
Main features of telecom services
At EU-27 level, the telecom services sector provided jobsto 1.2 million people and generated EUR 190 billion invalue added in 2005. The production value of telecomequipment exceeded EUR 17 billion.The telecom services sector is a relatively important partof the non-financial business economy with an averageof 3.5 % of value added for the EU-27 in 2005. In Bul-garia, it represents more than 10 % of value added in thenon-financial business economy. In Austria, on the otherhand, the share barely exceeds 2 %.In terms of employment however, the share of telecomservices in the non-financial business economy is muchsmaller. It varies from 2 % in Bulgaria down to 0.5 % inSpain, Portugal, Luxembourg and the Czech Republic,with an EU-27 average of 0.9 %.The weight of the sector is in all countries significantlyhigher in terms of value added than employment, indicat-ing a particularly high apparent labour productivity (valueadded per person employed) in this sector.
Fig. 1: Share of value added and employment of telecom services (Nace I 64.2) in the non-financialbusiness economy in EU-27 and Norway, 2005
0246810BGLUROCYELHULVSKPTBEEENOLTCZITUKEU-27ESFRDESEFIATvalue addedemployment
BG, CZ, EL: 2004 data.
Source: Eurostat (SBS - Annual)
CZ: number of employees instead of persons employedNo data available for IE, NL, MT, PL and SI.NACE Rev.1.1, group
I
64.2 telecom services: In addition to the transmission of information this group also covers activities whichoffer access to a certain network, such as the internet (incl. transmission of sound, images, data or other information via cables,broadcasting, relay or satellite: telephone, telegraph and telex communication, maintenance of the network, transmission (transport)of radio and television programmes, internet access but excl. provision production of radio and television programmes even if inconnection with broadcast)
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38/2008 —
Statistics in focus
Tab. 1: Main characteristics of telecom services (NACE I 64.2) in the EU and Norway, 2005
TurnoverEU-27
29 000*421 219190 262129 922242 33960 34046 2231 171 200
BE
1 06614 0236 3764 0037 8592 3731 94229 218
BG
9941 473872699
860196
322
27 853
CZ
5143 9242 0491 6131 95743640022 080
DK
3296 4012 6031 4834 1771 12044019 640
DE
98571 89033 72921 53045 45312 1995 269210 441
EE
10957725220432248503 046
EL
2697 2983 8132 4943 7251 31974428 814
ES
82336 34617 03813 57119 6393 4673 89062 071
FR
3 52657 29725 27215 97832 7799 2944 676148 106
IT
2 76251 25822 92617 99728 4024 9305 42399 718
CY
84460362221991411302 889
LV
276667353291314611025 816
LT
30881233726048277886 753
HU
9204 8142 1401 5462 77759359819 284
AT
2277 2113 042:4 3701 02969418 697
PT
9387 4703 0852 4084 70267782316 434
RO
2 7663 4371 8621 3771 5924854 12843 717
SK
1031 52077160974616225310 092
FI
3326 4011 7909564 98883445118 873
SE
5859 8864 0092 1715 5511 8381 18932 983
UK
4 95886 39537 27923 37550 19713 90410 148222 462
NO
6287 0472 7231 8754 30684770812 363
PersonnelcostsGrossinvestmentNumber ofemployeesNumber ofenterprisesValue added atfactor costGross operatingsurplusTotalpurchases
EUR millionEUR millionEUR millionEUR millionEUR millionEUR million
*approximate rounded figure.
Source: Eurostat (SBS - Annual)
BG, CZ and EL 2004 data (in italics), due to confidentiality reasons data for IE, LU, MT, NL, PL and SI are missing.
Fig. 2: Share of the number of employees intelecom services in the EU-27, 2005
Germany18%France13%Italy9%Spain5%Romania4%Rest ofthe EU32%UnitedKingdom19%
Source: Eurostat (SBS - Annual)
Four countries cover 63 % of the EU value added oftelecom services, a rather weak concentration comparedto their 66 % share in EU GDP. This is consistent with aservices activity targeting the domestic market. In termsof value added, the United Kingdom ranks first, Germanysecond, followed by France and Italy. (See Table 1).Compared to 2004 data on value added, the UnitedKingdom took over the lead from Germany.Employment in telecom services is even less concen-trated than value added. The first five countries cover63 % of EU employment (Figure 2). Yet, among the firstfour, the country ranking is the same as for value added.
Fig. 3: Index of turnover, EU-27 (2000=100)
1001101201301401502000 2001 2002 2003 2004 2005 2006Telecom services Total industry
Source: Eurostat (STS)
The index of turnover of telecom services in EU-27 (Fig-ure 3) shows an uninterrupted growth during the wholeperiod from 2000 to 2006. Whereas the growth was verystrong at the beginning of the period, the growth ratesslowed noticeably especially towards the end of theobservation period in 2006. In contrast, total industrygrew more slowly, with almost zero growth during the2001-2003 recession, but picking up rapidly afterwards.Turnover and value added in telecom services steadilyincreased, in spite of lower tariffs and communicationpricing, largely due to market deregulation, liberalisationand increasing competition but also partly imposed byEU regulations on roaming costs. Therefore the volumemust have increased more rapidly.
Statistics in focus
— 38/2008
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Investments in telecom services
Fig. 4: Gross investment as a share of value added (%) in EU-27 and Norway, 2005
020406080100ROBGCYSKBESELVHUUKPTNOLTFIEU-27ITESATPLEECZELFRDKDELUTelecom servicesNon-financial business economy222
CZ and EL: 2004 data. No data available for IE, NL, MT and SI.
Source: Eurostat (SBS - Annual)
Expansion of the broadband and mobile phone networkinfrastructure and the widening range of services linkedto mobile phones are the main driving forces for invest-ments in telecom services. Gross investments in tangiblegoods as a share of value added (investments rate) wasclearly higher for telecom services (24 %) than the aver-age in the non-financial business economy (18 %) in theEU-27. Nevertheless, in 13 countries of those shown infigure 4, the investment rate in telecom services waslower than the average in the 'non-financial businesseconomy', most noticeably so in Bulgaria, Latvia, Lithua-nia, Slovakia and Norway.An exceptionally high value (222 %) was observed forRomania, due to a large telecom operator replacing mostof its network infrastructure during 2005. Bulgaria (42 %),Cyprus and Slovakia ranked next. In several West Euro-pean countries there were relatively small investments,with the investment rate in Germany, Denmark andFrance ranging below 20 % of value added and Luxem-bourg at barely 10 %.Figure 5 shows investments per person employed intelecom services, which stood at EUR 38 700 in theEU-27, far above the EUR 7 610 for the non-financialbusiness economy. This is partly due to the relatively lowemployment in telecom services, compared to the non-financial business economy.Whereas in Romania investments in telecom servicesamounted to EUR 93 100 per person employed, thatratio was EUR 63 900 in Belgium and EUR 62 300 inSpain but only EUR 11 900 in Bulgaria (2004 data),which was still far above the ratio of this country for thenon-financial business economy (EUR 1 200).
Fig. 5: Investments per person employed in 2005 in EU-27 and Norway, (Thousands EUR)
0102030405060708090100ROBEESNOITPTUKCYEU-27ATSELUFRHUELSKDEFIDKPLCZLVEELTBGTelecom servicesNon-financial business economy
BG, CZ and EL: 2004 data. No data available for IE, NL, MT and SI.
Source: Eurostat (SBS - Annual)
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The telecom sector in the EU
The telecom services sector is a fast growing high-technology services sector, with high innovation and considerable investments.
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