ARLINGTON, Va.-The telecommunications market achieved 11 percent growth last year with revenues of $298 billion, according to a report issued by the Telecommunications Industry Association and the MultiMedia Telecommunications Association. The overall economy is averaging growth rates of approximately 5 percent annually.
The services sector accounted for 75 percent of the telecommunications industry’s revenues and grew by 9 percent, while the equipment market grew 17.8 percent compared with 1995 totals, the report said. The fastest growing equipment categories last year were computer telephony integration, wireless and ISDN.
David Wilkofsky and Arthur Gruen, authors of the 1997 MultiMedia Telecommunications Market Review and Forecast, said the growth was fueled by a restructured U.S. economy that encourages competition, technology advancements and interoperability.
According to the report, wireless communications services generated $31.4 billion in 1996, 23.3 percent more than 1995, and new personal communications services networks netted 800,000 subscribers during the year.
The report also noted the United States has been running a trade surplus in the telecommunications industry during the last 3 to 4 years. The United States recorded a surplus of $3.6 billion in 1996 with exports totaling nearly $17 billion. Gruen said U.S. exports were $7 billion in 1991 and during the 1980s, the United States consistently ran a deficit in the telecommunications market.
The authors also noted competition in the industry is complementary rather than predatory. Gruen explained it is easy to view the industry as a pie, with every piece diminishing the share for the rest of the industry. However, Gruen said competition tends to expand the size of the pie and create more opportunities for other participants, and he cited the success of the paging industry when cellular services were introduced as an example.
