TIA Reports Telecom Industry is Sustaining Growth

Spending on network equipment, and revenue from telecommunications services, rose in 2005, and are expected to continue their ascent in the coming years, according to TIA (Telecommunications Industry Association), which today released to the press the findings of TIA’s 2006 Telecommunications Market Review and Forecast.

2005 was a strong year for the overall telecommunications industry, said Matthew J. Flanigan, president of TIA, noting that the association for this first time expanded its report to cover the Middle East and Africa.

After falling by 71 percent between 2000 and 2003, spending on network equipment rose by 31 percent during the past two years, according to the report, which noted the rebound in spending on fiber was spurred by the RBOC entrance into TV services. Flanigan mentioned the TIA is pushing for video franchise reform in an effort to drive further investment in video infrastructure.

The growth in network equipment spending is expected to average 5.2 percent to $24 billion in 2009, still less than half the total in 2000 but 61 percent higher than in 2003.

Worldwide telecommunications revenue totaled $2.4 trillion in 2005, up 10.6 percent from 2004. The U.S. market accounted for $857 billion, while other regions generated a combined $1.8 trillion. Revenue in the United States rose 8.9 percent, led by double-digit increases in network equipment, wireless devices, wireless services, services in support of equipment and Internet access, unified communications, video conferencing public room services and Web conferencing.

Europe had the largest telecom market, at $931 billion in 2005, followed by the United States, and then Asia Pacific at $630 billion.

Other trends noted in the report are lowering U.S. broadband prices, due to competition between telcos and cablecos; slowing subscriber growth for U.S. wireless services; and enormous growth potential for wireless abroad, particularly in China and India, said Arthur Gruen of Wilkofsky Gruen Associates, one of the principal authors of the report.

TIA (Telecommunications Industry Association)

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