Total spending in the U.S. telecommunications industry rose 8.9% in 2005 to an estimated $856.9 billion and is expected to climb 10.2 percent in 2006 reaching $944.7 billion, according to the newly released TIA's 2006 Telecommunications Market Review and Forecast.
TIA said this growth was led by double-digit increases in network equipment, wireless devices, wireless services, services in support of equipment, Internet access, unified communications, videoconferencing public room services and Web conferencing.
TIA is also predicting that the U.S. telecommunications industry will grow at a projected 9.0% compound annual growth rate (CAGR) 2006-2009, reaching $1.2 trillion.
Total international communications spending (not including the United States) reached $1.8 trillion in 2005, up 11.4% over 2004, fueled by double-digit increases in wireless transport services, Internet access, public network equipment and professional services in support of public network and enterprise equipment. Middle East/Africa was the fastest-growing region in 2005, with an 18.4% advance to $66.7 billion. Overall international telecommunications spending is expected to reach $2.7 trillion in 2009, growing at a 10.4% CAGR 2006-09.
Additional highlights of the report include:
- Total U.S. equipment and software rose 5.4% in 2005, reaching $165.7 billion in 2005. A principal driver of this growth was revenue from wireless devices.
- Wireless devices revenue reached $15 billion in 2005, a 22.6 percent increase over 2004.
- Network equipment revenue rose over the past two years after falling 71 percent between 2000 and 2003, with increased spending on fiber optic cable the principal driver of the rebound.
- Total revenue in the network equipment and facilities market is expected to reach $20.9 billion in 2006 and achieve a 5.2 percent CAGR 2006-2009, reaching $24.4 billion in 2009.
- The U.S. enterprise equipment market expanded 6.9 percent to $98.3 billion in 2005. In the enterprise market, the long-heralded move to convergent technologies is now taking off and IP equipment and IP-based services are beginning to replace legacy technologies. As legacy equipment ages, replacement demand, along with rapid growth in video-conferencing and unified communications, will continue to fuel spending. Total spending on enterprise equipment is expected to reach $104.5 billion in 2006, a 6.3 percent increase over 2005.
- Spending on transport services in the U.S. increased 4.2 percent in 2005, reaching $310.8 billion. Landline revenue continued to fall in 2005, recording its fifth consecutive year of decline, and wireless continued to grow at double-digit rates.
- Total landline revenue in 2005 reached $192.3 billion, a 1.4 percent decrease over 2004; wireless services revenue reached $118.6 billion in 2005, a 14.8 percent increase over 2004. The downward trend in landline spending is the result of the erosion in landline subscribers. For example, with broadband Internet subscribership on the rise, the need for a second line to support dial-up Internet access has declined.
- In 2005, the number of wireless subscriptions, 194.5 million, passed landline subscriptions, 172.1 million, and with approximately two-thirds of the U.S. population subscribing to a wireless service, the market still has room for expansion. TIA expects wireless penetration to rise to 88 percent by 2009, which would translate into 270 million subscribers.
- Internet access revenue rose 10.2 percent in 2005, fueled by rising broadband penetration.
- The U.S. broadband market has grown from 4.5 million high-speed Internet access subscribers in 2000 to 41.2 million in 2005.
"The U.S. market is back on an upward path and the international markets are growing even faster. With revenues from international markets more than double that of the U.S., the global marketplace is clearly where companies must compete," states TIA President Matthew J. Flanigan.
http://www.tiaonline.org/business/research/mrf
