ARLINGTON, Va. -- The Telecommunications Industry Association (TIA), the leading association representing the manufacturers and suppliers of high tech communications networks, today released its 2014 ICT Market Review & Forecast (MR&F) – the industry’s most comprehensive data review and analysis. The report finds that in 2013, for the first time, United States information and communications technology (ICT) spending accelerated faster than overall global spending – a trend that is expected to continue through 2017. Additionally, the U.S. has passed Europe in overall ICT spending by region, and now ranks behind only Asia.
Big data is driving the accelerating investment in the U.S. market. Growing consumer demand for data led to a double-digit increase in spending on wireless telecommunications equipment last year, as carriers rolled out long term evolution (LTE) networks. Meanwhile, specialized services that rely on, and protect, data – including cloud services, machine-to-machine communications (M2M) and cybersecurity – all saw large spending gains in 2013. In fact, spending on cybersecurity grew faster in 2013 than in any recent year, and has shown significant increases in each of the last three years.
“The MR&F makes it clear that the historic, data-driven transition of the global ICT industry continues, with the U.S. leading the way,” said TIA president Grant Seiffert. “A significant milestone was reached in 2013, with U.S. ICT spending growth outpacing the rest of the world, and our overall spending leaping ahead of Europe.” Seiffert continued, “It’s all about data – building the infrastructure to handle it, managing it, storing it and protecting it. Smartphones and LTE are driving consumer demand, and companies in the U.S. are spending heavily on the specialized services that rely on data – in particular, cloud computing and M2M. At the same time, ICT spending increasingly reflects the significant challenge of protecting data. With high-profile breaches occurring on a regular basis, companies have dramatically increased their investment in cybersecurity.”
The MR&F provides the industry's most comprehensive data review and analysis, with forecasts through 2017, of domestic and international spending and usage of wireless and wireline communications, specialized services (cloud computing, M2M, cybersecurity, etc.), enterprise networks and more.
The MR&F is compiled annually by TIA and used as a key resource for industry executives, government policymakers, analysts and the media. The report provides a global industry overview along with chapters that offer a deep-dive into specific industry segments. The MR&F also features a “Major Trends” chapter, providing in-depth analysis of significant developments, including advancements in M2M, cybersecurity and sustainability. More detail on some of the key MR&F data follows.
Industry Growth: U.S. Leaps Ahead
In 2013, telecommunications spending grew 6.6 percent in the United States, surpassing the non-U.S. growth rate of 4.5 percent. This marks a significant reversal – TIA’s MR&F has always shown faster growth globally than in United States. In 2012, spending in the U.S. grew 6.3 percent, while spending internationally grew 7.2 percent. The overall U.S. growth during 2013 also was the most significant in the last four years – jumping from a low of 2 percent in 2010. The MR&F predicts that over the next four years spending growth in the U.S. will continue to outpace the combined growth in the rest of the world.
In another milestone, the U.S. in 2013 surpassed Europe in overall ICT spending. $1.25 trillion was spent in the U.S. in 2013, while $1.22 trillion was spent in Europe. Asia continues to lead all regions, with $1.67 trillion spent in 2013.
Cloud, M2M and Cybersecurity Are Huge Drivers
The principal driver of spending in the U.S. market is the soaring demand for data. Data usage through smartphones continues to grow rapidly, while heavy investment is being in made in specialized services – cloud computing, M2M, cybersecurity – that are critical to the Big Data revolution.
The fastest growing of the specialized services was M2M, which jumped 61.6 percent (to $8.5 billion) in 2013 and is predicted to achieve a 34.8 percent compound annual increase over the next four years. Cloud services rose 19.6 percent in 2013 (to $56.2 billion) and is expected to see a 17.5 percent compound annual growth over the next four years.
Meanwhile, businesses are clearly recognizing the imperative to protect the valuable data they control. In 2013, cybersecurity spending saw its largest jump in years – rising from $26.5 billion in 2009 to $40 billion in 2013 (a 15.9 percent increase over 2012), and is projected to total $63.5 billion in 2017.
Mobile: LTE Takes Over
Smartphones generated 91 percent of the total handset market revenue in 2013, and LTE-enabled smartphones (introduced in 2012) became the dominant handsets in 2013.
The LTE rollout is sending U.S. wireless infrastructure spending higher. In 2013, $33.6 billion was spent on wireless infrastructure – an increase of 11.7 percent from 2012 – while U.S. wireline spending was $38.6 billion. U.S. wireline infrastructure spending will continue to outpace wireless for the next several years, but in 2017 is predicted to be surpassed by wireless infrastructure spending. At the same time, the switch to LTE is leading consumers to spend more per month on wireless service. In 2013, the average revenue per user (ARPU) in the U.S. increased 5 percent – the largest jump in the last four years.
Overall spending on both wireless and wireline infrastructure will total $323 billion over the next four years (2014-2017) according to TIA estimates – an increase of 25 percent over the $259 billion that was spent during the previous four years (2010-2013).