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 a new report from IDC, worldwide telecom spending will rise by 4.4% in 2004 and will see a compound annual growth rate (CAGR) of 4.7% from 2003 to 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, says IDC. 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.
