International telecom market to reach $2 trillion by 2007

The telecommunications market outside the U.S. is expected to grow at double-digit rates, perhaps reaching $2 trillion by 2007, an industry group is forecasting.

The Telecommunications Industry Association (TIA) said growth would be fueled by burgeoning wireless and support services. For the regions covered by the TIA report - Canada, Mexico, Western Europe, Eastern Europe, Latin America, and Asia-Pacific - growth in 2004 could reach 10.3 percent to $1.5 trillion. By 2007, the growth rate could hit 10.5 percent.

TIA, which represents the communications sector of the Electronic Industries Alliance, said spending on wireless and support services is expected to reach $574.3 billion and $655.7 billion respectively by 2007. "While total wireless market penetration may have been lower than expected in 2003 due to the [SARS] epidemic that broke out in China - the largest wireless market in the world - wireless comprised 43 percent of total transport spending in 2003," TIA concluded in its 2004 Telecommunications Market Review and Forecast.

Notably, the introduction of 3G services over the next four years will fuel wireless market growth at a double-digit rate even as penetration growth slows. By 2007, wireless will account for 54 percent of total transport services, the group said.

Leading the way will be high-speed access, which the report said will be a principal driver of international equipment spending over the next four years, helped by an improving economic environment and rising profits.

TIA expects spending on telecommunications equipment to increase by 5.4 percent in 2004, then to grow at high single-digit rates through 2007. For the 2004-07 period, equipment spending in the five regions will expand at an estimated 7.4 percent CAGR, rising from $260.1 billion in 2004 to $328.1 billion in 2007.

"We expect the profile of international broadband growth over the next four years to match that of wireless subscribers achieved over the 1998-2002 period. As the worldwide broadband market expands, we will see an increased need for infrastructure to support the added traffic that will in turn revitalize the network infrastructure equipment market," said TIA President Matthew J. Flanigan.

The report also forecast that the landline market will continue to grow at single-digit rates as the migration from wireline to wireless continues. Wi-Fi will also continue to stimulate the equipment market.

The report is available in hard copy or on CD-ROM from TIA's web site.

- Patrick Mannion

CommsDesign.com