Worldwide spending on Telecom Services and Pay TV Services reached $1.566 billion in 2021, an increase of 1.6% year over year, according to the International Data Corporation (IDC) Worldwide Semiannual Telecom Services Tracker.
- IDC expects worldwide spending on telecom and pay TV services to increase by 1.4% in 2022 and reach a total of $1,588 billion.
- Europe, Middle East, and Africa (EMEA) market grew 0.2 percentage points faster than forecast in October 2021 Asia/Pacific grew 0.5 percentage points faster
- The Americas grew 1.0 percentage points faster
Some additional observations from IDC:
Inflation should nominally have a positive impact on this market: the operators will be increasing their tariffs, clients will be paying more, and the total value of the market should be growing faster than previously expected. However, inflation also generates a deterioration of consumers' and businesses' purchasing power, thus causing a decrease in demand. It is to be noted that the impact of inflation in the telco services market will be stretched over the next several years. This is because a high proportion of users have two-year contracts with operators that guarantee stable fees until their contracts expire. That also means that the effects of inflation will initially be higher in the markets with a higher proportion of prepaid customers.
War in Ukraine will have a negative effect on the market for communications services in EMEA. It will primarily hit the Ukrainian market, which will see a considerable decline due to destroyed network infrastructure and a huge number of people leaving the country. The Russian market will also decline as local demand will be under pressure due to the recession caused by international sanctions. On the other hand, the war will positively impact the markets of neighboring countries (Poland, Slovakia, and Romania) that are hosting large numbers of Ukrainian refugees.
In addition, the COVID-19 saga has not ended yet. The current lockdowns in China and a possible emergence of new variants of the virus in the rest of the world might bring additional impacts to the market, primarily in the business fixed data services section. Although the previous waves of COVID did not drastically affect the global market for telecom services, the related global supply-chain disruptions are already causing shortages of end-user and network equipment and thus create new concerns for supply side participants. This all contributes to IDC's conservative forecast.
