The nuclear winter of telecom appears to be fading even further into the past. The Telecommunications Industry Association (TIA) today released its 2005 Market Review and Forecast, reporting significant strides in the industry attributable to IP and wireless products, services and equipment.
The group’s annual study showed spending in the U.S. telecom industry rose 7.9 percent in 2004 to an estimated $784.5 billion, compared to gains of only 3.6 percent in 2003 and 1.9 percent in 2002. That growth only will continue through at least 2008, at a projected 9.5 percent compound annual growth rate, according to the TIA, which predicts the industry will reach $1.1 trillion by that time.
Helping to trigger that trend, the enterprise equipment market in 2004 expanded 5.9 percent to $99 billion, more than the combined gain of the previous three years. The shift to IP and convergent systems is boosting most segments of equipment spending, says TIA. The group estimates total spending on enterprise equipment will reach $105.6 billion in 2005, a 6.8 percent increase over 2004.
Another factor was the 12.5 percent rise of Internet access revenue, fueled by rising broadband penetration. Broadband subscribers increased from 5 million in 2001, to more than 32 million in 2004, and TIA expects broadband to surpass dialup in 2005, reaching nearly 57 million subscribers by 2008. TIA predicts overall spending on Internet access services to increase at a 6.8 CAGR to an estimated $35.3 billion by 2008.
