Despite the increasing likelihood of a recession the Telecommunications Industry Association (TIA) is projecting steady U.S. and global telecom market growth in the next few years producing an estimated $4.9 trillion in revenue in 2011.
In the U.S. the telecom market is expected to see 7.2% in compound annual growth rate (CAGR) through 2011 with a 12.5% projected increase globally. For Internet access alone that could mean revenue will exceed $50 billion by 2011 according to the report.
| Wireless handset manufacturers are developing handsets to accommodate many different technologies which will lead to wireless service revenues passing landline revenues in 2009. TIA 2008 Market Review and Forecast | |||||
| Wireless handset manufacturers are developing handsets to accommodate many different technologies which will lead to wireless service revenues passing landline revenues in 2009. TIA 2008 Market Review and Forecast | ||||||
During this period of growth TIA projects that VoIP will begin to overtake circuit-switched residential landline connections and experience substantial adoption in the enterprise. At the same time the report estimates that internationally wireless voice services will surpass landline in 2009. Due to IP equipment sales are on the rebound as enteprises and carriers move from legacy services to IP-based next-generation networking technologies.
In its 2008 Telecommunications Market Review and Forecast report TIA President Grant Seiffert said telecom services would probably be among the last consumables affected by a slowdown. 'Telecom is not at the center of this downturn like they were in 2001 ' Seiffert said. 'Not that telecom is immune but it's an area where there's a lot of growth right now.'
TIA has produced a market review and forecast every year since 1985 and provides projections and trends for the upcoming year as well as for the upcoming three-to-five-year period in the U.S. and internationally. The report looks at the following sectors and services: landline wireless enterprise network equipment broadband VoIP data transport and Internet access.
In this year's report the high-level findings include projections of healthy increases in product and service revenues in the U.S. and globally from 2008 through 2011 adding that demand-driven rather than supply-driven growth is the key. In fact user demands for increased bandwidth could actually lead to shortages if service providers can't keep pace with broadband and wireless network upgrades the report said.
'There's a thirst for bandwidth right now that's beneficial to the industry ' said Arthur Gruen principal of Wikofsky Gruen whose firm produces the TIA market report.
In the U.S. the TIA report noted the following market drivers:
- Data applications will be the big drivers in wired and wireless network traffic with voice almost an afterthought. The term 'data' includes consumer video and entertainment and high-volume business applications on the enterprise side.
- In the wireless market subscriber growth slowed to single digits in 2007 but by 2011 TIA expects 84% of all service revenue growth to come from data rather than voice.
- Soaring bandwidth consumption will lead to increased investment in fiber with Carrier Ethernet supporting broadband and wireless network upgrades. Bandwidth consumption doubled in 2006 and quadrupled in 2007. 'Video is certainly one of the key drivers ' Gruen said.
- In the business market unified communications is a big driver in that companies want to offer services on a unified IP platform that will help workers be more productive and improve connectivity.
- In the consumer market the fight between traditional telcos and cable companies will continue with competitive voice data video and wireless bundles.