Report: Broadband, Entertainment Fuel Market

Driven by demand for broadband, the U.S. telecommunications market grew at its fastest rate since 2000 last year, according to a report released Thursday by TIA.

And entertainment applications on both broadband and wireless networks are expected to help the market sustain growth, even if its not at the double-digit clip the industry has experienced in the past, said Arthur Gruen of Wilkofsky Gruen Associates, a co-author of TIAs report.

TIAs annual report gives an overview of the entire industry, including information on landline, wireless, equipment and international markets.

It concluded the U.S. market grew 9.3 percent in 2006 to a total of $923 billion in revenue. The worldwide telecommunications market grew 11.2 percent to $3 trillion.

The report estimated 87 percent of Internet users will have broadband access by 2010 and that growth is driving both landline and wireless providers to upgrade networks and offer bundled services.

Consumers are thirsty for broadband, and this report shows carriers are rushing to meet the demand, said Grant Seiffert, TIA president.

With many systems already established, much of the future growth in the industry will come from providers coming up with and offering new applications, Gruen said. Increased demand for TV, music and video games over these networks likely will be a force in the industry in the coming years, he said.

The competition already has started as more than 12 million miles of fiber were deployed in 2006, with 10 million being deployed by telephone companies seeking to add TV and other high-speed services. Wireless data and multimedia services are also expected to make up nearly a quarter of wireless revenue by 2010, up from 10 percent in 2006, the report said.

VoIP is expected to hit 25.5 million subscribers by 2010 up from 9.5 million last year, and IP systems will overtake traditional systems by 2009, according to the report.

Worldwide, revenue in the industry is expected to reach $4.3 trillion by 2010 and annual growth is expected to be at 9.1 percent, the report said.



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