US Business Spending on Wireline Data Declining

Across nearly every category of wireline data services, spending by U.S. businesses is falling in 2009, reports In-Stat. Overall, the market research firm expects a nearly 2 percent decline in U.S. business spending on wireline data services, which represents the first time this market has declined in the 10 plus years In-Stat has been tracking it.

Wireline data services include expenditures on wide area network (WAN) data transport services, as well as, dedicated Internet access (including cable and DSL), network-based IP VPN, private line, frame relay, ATM, and Ethernet services. The category does not include managed services, such as, hosted IP telephony, LAN infrastructure, security, and other managed solutions, which In-Stat tracks separately.

Specifically, In-Stat found spending on wireline data services by U.S. enterprises (1,000+ employees) is on track to decline from $23 billion in 2008 to $22.4 billion in 2009. Spending will stabilize in 2010 before returning to growth reaching $25 billion by 2012.

Ethernet and IP VPN services are among the lone bright spots in the market. For example, spending on IP VPN services by U.S. small businesses (5-99 employees) is projected to grow from about $100 million in 2008 to over $250 million in 2012.

Spending on ATM, frame relay and private line services is particularly weak, declining about nearly 10 percent from 2008.

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