TELECOM SPENDING PROJECTED TO GROW AT DOUBLE-DIGIT RATES
Demand for applications will drive growth for public network and enterprise markets, Telecom Industry Assn. (TIA) said as it released its 2001 MultiMedia Telecommunications Market Review and Forecast. Enterprise spending on equipment and software reached $92.1 billion in 2000, and network service providers spending hit $53.2 billion, report said, and despite significant factors creating downward pressure, “we believe there are stronger factors creating upward pressure on spending.”
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Telecom growth factors include growth in supply of bandwidth, which has caused drop in its price and has led to necessity for bundling applications with bandwidth to stimulate usage and increase margins, TIA said. Demand will lead to further investments in bandwidth and will generate new uses such as emerging hosted applications industry and wireless broadband, report said.
Overall, U.S. telecom market grew 12.5% in 2000, generating revenue of $609.2 billion. Spending on telecom equipment continued double-digit growth with 13% increase over 1999 to $159.8 billion; transport services rose 8.9% to $287.6 billion, specialized services soared 62.6% to $5.8 billion. Specialized services include unified messaging, voice messaging, broadband Internet access. Enterprise spending on professional and technical services in support of voice and data communications climbed to $138.3 billion and network service providers spending in support of network infrastructure equipment reached $29.9 billion.
“Overseas, we see other countries trying to replicate the U.S. model,” TIA Vp Mary Bradshaw said. Other countries are investing in telecom to try to improve their economic performance, report said. Worldwide telecommunications spending reached estimated $1.8 trillion in 2000, up 15.7% over 1999. International markets accounted for $1.2 trillion.
Spending in U.S. telecom industry will continue its double- digit growth over 2000-2004 period at projected 11.9% compound annual rate to $954 billion, report said. International telecom spending will total $2.1 trillion in 2004, growth of 16.1% compounded annually.