Spending on telecom services will pass the $1 trillion mark in 2004, predicts IDC's Worldwide Telecommunication Black Book

February 9, 2004

2 Min Read

FRAMINGHAM, Mass. -- Worldwide telecommunications services spending will surpass the $1 trillion mark for the first time in 2004, helping the telecommunications industry to re-establish its momentum after several years of slow growth. According to the latest version of the industry-standard IDC Worldwide Telecommunication Black Book, worldwide telecom spending in 2004 will be 4.4% greater than in 2003 and will enjoy a compound annual growth rate (CAGR) of 4.7% from 2003-2007.

"Data offerings will play an important role in driving overall telecom growth, particularly IP-based services such as broadband Internet access and IP VPNs," said Rena Bhattacharyya, program manager, Worldwide Telecom Markets at IDC. "Nevertheless, the voice market will continue to be a key part of the industry, and will generate more than two-thirds of the industry's revenue throughout the forecast period."

In 2004 alone, data services revenue will grow 16% over the previous year, and will account for one quarter of the total market. Demand for data services will be strong in all regions, producing a 15% CAGR for total data services worldwide and a 30% CAGR for wireless data services. By 2007, IDC believes worldwide spending on data services will reach $375 billion, led by North America and Asia/Pacific, while wireless data services will grow to more than $150 billion.

Worldwide spending on telecom equipment in 2004 will grow 6% over the previous year to more than $52 billion. IDC expects equipment spending to gradually accelerate throughout the forecast period, achieving an 8.9% CAGR on demand from all regions. North America will account for half of the market, while Asia/Pacific and Western Europe will each contribute one fifth of total spending.

"While a return to positive growth in telecom equipment spending is in line with expectations, the market will continue to be challenging place," said David Emberley, telecom and internet analyst at IDC. "Despite these challenges, equipment providers can still capitalize on a variety of market opportunities by focusing on solutions that support revenue growth, either through greater operational efficiencies or new value-added services."

IDC

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