TIA deems 2011 a good year for telecom market

Kate Gerwig
11 Apr 2011

If you’re a telecom equipment vendor, 2011 should be a banner year unless you’re selling rotary dial phones.

And if you’re a service provider, you’ll need that increased revenue from wireless data and broadband-enabled services to build up your network infrastructure to handle the wild traffic growth from wireless data and video content.

Taking the pulse of telecom market growth, the Telecommunications Industry Association (TIA) projects that 2011 may be the biggest year ever in communications spending, topping all pre-recession figures, according to its mammoth 2011 telecom market review and forecast.

I listened to Wilkofsky-Gruen Associates economist Arthur Gruen (who inspires a Walter Cronkite-esque confidence) discuss telecom industry trends addressed in the TIA report via Skype on a TIA webcast.

Gruen should know. He has written the TIA report for the past 15 years, and projects $4.34 trillion (with a “t”) in global telecom spending (equipment and services) this year, a number he expects to climb to $5.31 trillion in 2014 -- which translates to a compound annual growth rate (CAGR) of 6.9% over the next four years.

TIA’s 474-page annual in-depth analysis of the global telecom market isn’t filled with shockers, unless you expected last-gen wireline voice services to make a comeback. Still it’s good to see numbers that provide a welcome antidote to the global recession of the past few years.

Of course not every segment of every global market is on an all-out growth path. There are continuing declines in wireline voice, an increasingly saturated wireless market, slowing broadband subscription growth and falling legacy equipment sales. “Increases hide a lot of things,” Gruen said. “There are some rapidly growing areas, but spending on landline is still a big segment of the market, for example, and it is declining.”

Not surprisingly, international wireless and broadband are telecom’s main drivers, and both are putting a strain on network infrastructure, which is causing operators to increase their network investments, Gruen said.

The bandwidth glut of a decade ago caused the last enormous telecom downturn that arrived complete with dire predictions that there was enough infrastructure and capacity to last until the end of time -- or close to that anyway. Almost everybody lost money and jobs, and if you lived through it, you remember the photos of abandoned spools of untrenched fiber.

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