WASHINGTON-A new report says wireless technology is a big force behind renewed telecom industry spending.
The Telecommunications Industry Association said telecom equipment purchases rose 7.9 percent to approximately $784 billion last year, following three years of decline. “An increase in equipment and software revenue and double-digit increases in wireless services, services in support of equipment, and specialized services spurred this growth, offsetting decreases in landline services revenues,” said the TIA report.
From 2000 to 2003, according to the report, equipment and software revenue fell $30.5 billion-a cumulative 17.4-percent decrease-led by the network equipment segment. The report said the network equipment market began to emerge from its slump in 2004 and recorded a 4.7-percent advance, reaching $15.8 billion. The reversal stems from the market’s evolution toward integrated full-service providers offering bundled services at flat rates, the report’s authors stated
In its 2005 market review and forecast, the report predicts the telecom industry will grow at a projected 9.5-percent compound annual growth rate from 2005 through 2008.
The report said the wireless sector is key to the industry’s comeback.
“Wireless services is one of the key market drivers and continues to gain traction as carriers introduce more data services such as online video games, high-speed third-generation wireless services, Wi-Fi technology and WiMAX,” the report stated. The report said wireless services revenues are expected to increase at a 10.4-percent compound annual growth rate to $151.1 billion in 2008.
Broadband access is predicted to be the key driver of equipment spending in international markets, tripling in the next four years and rising to $100.8 billion by 2008, said the report. “Growing demand for broadband, along with the introduction of IP networks, the rollout of 3G and Wi-Fi services will boost the equipment market.” International spending on telecommunications equipment, according to the report, is predicted to increase by 7.4 percent in 2005 to $256 billion and then to grow at high single-digit rates through 2008.
