German digital association sees slowing growth in 2017

October 18, 2016 4:32 AM EDT

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FRANKFURT (Reuters) - Germany's telecommunications and IT industry association expects slowing growth next year as a boom in demand for expensive smartphones ends, sales of PCs and notebooks slow and price competition and regulation dampen telecom operators' revenues.

Industry revenues are expected to grow 1.2 percent to 162 billion euros ($181 billion) in 2017, industry association Bitkom said on Tuesday, reiterating its forecast for 1.7 percent growth in 2016.

Bitkom represents companies employing a total of 1 million people, more than any other sector in Germany bar engineering. Major employers include SAP, Deutsche Telekom and United Internet.

"Considering economic turbulences such as Britain's decision to leave the European Union or recent concerns about the banking sector, it is good news that we are able to confirm our forecasts that we made in spring," said Bitkom President Thorsten Dirks, who is also chief executive of Telefonica Deutschland.

Software will continue to drive growth, Bitkom said, with sales up 6.2 percent in 2016.

Network operators - who account for one-third of Bitkom's total industry sales - are expected to spend 2.1 percent more on infrastructure next year but make 0.6 percent less in revenue.

($1 = 0.8928 euros)

(Reporting by Georgina Prodhan; Editing by Mark Potter)



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