Report: Economic recovery required for wireline telecom growth

The global telecommunications industry was not immune to the dampening effect of larger economic forces in 2012.

The global telecommunications industry was not immune to the dampening effect of larger economic forces in 2012, which slowed the industry's growth, contrary to earlier predictions, confirms a new market analysis from Insight Research Corp. The analysis determines that overall global spending for wireline services contracted in 2012, while spending on wireless services grew modestly.

According to the new study from Insight, telecommunications services revenue worldwide will grow from $2.2 trillion in 2012 to $2.7 trillion in 2018, a combined average growth rate of 3.8%. "Telecommunications revenues are driven by several factors – economic conditions, household expansion, population, and disposable income – to name a few," comments Fran Caulfield, research director for Insight Research. "Until these indicators strengthen we will continue to see modest improvements in growth areas, such as wireless data and IPTV, along with declines in mature services, such as voice and wireline data."

See also: Telecom sector seen outpacing GDP growth

Insight's 2013 Telecommunications Industry Review: An Anthology of Market Facts and Forecasts study notes that wireless subscriber growth compounded with rising usage will raise wireless revenues by 31% from current levels, yet wireline revenues will remain flat until substantial economic recovery kicks in. Despite these modest gains, the study finds that there are some sectors, such as Ethernet, cloud, and mobile, that will show double-digit annual percentage growth. In North America, wireless revenues are forecasted grow by 35%, with wireline broadband revenues to grow by 19% over current levels.

Insight's Caulfield continues, "Global telecommunications spending will hover around 3% of GDP; slightly lower in the U.S. Despite the weakness in these indicators, the fact remains that telecommunications is a key enabler of economic growth and service providers with the right strategy will prosper."

In addition to regional and service forecasts, the market research report from Insight provides an assessment of the key drivers of growth, including industry trends, network infrastructure and access technologies, future services, OSS/BSS and capex spending, and enterprise telecom markets.

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