TIA report: Telecom market outside of the U.S. will continue double-digit growth

The telecommunications market outside the United States will continue its upward trajectory, according to a recent forecast by the Telecommunications Industry Association (TIA; www.

Sep 1st, 2005

The telecommunications market outside the United States will continue its upward trajectory, according to a recent forecast by the Telecommunications Industry Association (TIA; www.tiaonline.org).

TIA President Matthew Flanigan says there is reason for optimism in the report’s findings. Flanigan says that when the telecom market declined in the U.S., it likewise declined in many other parts of the world. That is changing now, he says.

“We believe we have turned the corner for the telecommunications marketplace, compared to what it was in 2000 and 2001,” says Flanigan.

The market is expected to continue its double-digit growth from 2004 to reach more than $2 trillion by 2008, according to the TIA’s 2005 Telecommunications Market Review and Forecast. The forecast is published annually.

The report states that overall spending on telecommunications in the five regions covered in the report-Canada, Western Europe, Eastern Europe, Latin America and Asia/Pacific-will grow at an estimated 10.6% compound annual growth rate (CAGR). Principal drivers are improving economic conditions throughout the world, a growth in infrastructure equipment investment, as well as increased demand for mobile devices and wireless services.

In the U.S., however, Flanigan says growth will be mostly in the single digits, due to an existing, sophisticated telecommunications infrastructure.

“While growth in the U.S. is projected to single digits, it is still a large, vibrant and important market,” says Flanigan.

The report also states that the number of wireless subscribers is growing faster than the number of landlines in each region outside the U.S. and is expected to reach 1.9 billion in 2008, outnumbering landline subscribers by 69.1%. Wireless’ average penetration rate for all regions outside of the U.S. is expected to reach 44% by 2008.

“There are a variety of solutions, such as wireless, DSL, etc.,” says Flanigan. “Which solution is best will depend on the history of your network and geography.”

Flanigan says that many countries are choosing wireless because it can be installed in months, versus the years it may take to install a wireline network. For some countries, he adds, it may make sense to choose wireless as an economic and rapid way to increase service. Flanigan says if China or India go wireless, for example, they will develop a more advanced wireless network and actually leapfrog over similar networks in the U.S.

“The important thing is that people will go to the next stage of wireless and it may not matter the way they get there,” says Flanigan. “The world is moving toward more advanced wireless products and broadband wireless services, whether they are through existing mobile networks or new mobile or fixed networks.”

The report states that high-speed broadband access will be a principal driver of equipment revenue outside of the U.S. in the next four years. This growth will be aided by increased government support and a stronger economic environment. Broadband access revenue is expected to triple between 2004 and 2008, from $33 billion to $101 billion.

As the broadband market expands, the report says, the need for infrastructure to support the traffic will revitalize the network infrastructure equipment market.

The TIA expects equipment spending to increase at 8.1% CAGR, rising from $238 billion in 2004 to $325 billion in 2008.

“There isn’t a business today that doesn’t benefit from having high-speed broadband,” says Flanigan. “Even the small businesses today can look like a larger business and have better productivity.”

He adds, “Good communications is not a luxury. They are essential, and all of these foreign countries recognize that.”

The report states that Europe is expected to be the largest region in support services spending, reaching $354 billion by 2008. Flanigan says as the demand for equipment increases, the demand for services to support that equipment will also increase.

“As you get more communications hooked up, and applications flourish, there is a lot more activity-and this causes the service market to grow,” says Flanigan.

-Brian Milligan


The report at a glance

√ The telecommunications market outside the United States is expected to continue its double-digit growth from 2004 to reach more than $2 trillion by 2008.

√ Overall spending on telecommunications in five regions-Canada, Western Europe, Eastern Europe, Latin America and Asia/Pacific-will grow at an estimated 10.6% compound annual growth rate (CAGR).

√ The number of wireless subscribers is growing faster than the number of landlines in each region outside of the U.S., and is expected to reach 1.9 billion in 2008, outnumbering landline subscribers by 69.1%.

Source: The TIA’s 2005 Telecommunications Market Reviewand Forecast

More in Home
Sponsored
Are You Ready for Wi-Fi 6?