Global telecoms revenues

Global telecom revenue to hit $2 trillion in '08

Global telecom revenue will reach $2 trillion by the end of 2008, an increase of 7.6% over telecom revenue in 2007, research firm Gartner projects.

One of the biggest drivers for telecom growth in 2008 has been the expansion of the Asian telecom market, which Gartner says will surpass the North American market in total revenues for the first time in 2008. In total, the Asian telecom revenues will grow by 8% to $513 billion this year, just barely surpassing North American telecom revenues, which are projected to grow by 4.5% and to total $511.6 billion. Looking forward, Gartner expects the Middle East and Africa to be the fastest-growing regions for telecom revenues over the next four years, with a compound annual growth rate of 8.6% projected between 2007 and 2012.

As far as trends within the telecom industry, Gartner projects that mobile services will continue to eclipse fixed-line services and that a strong increase in mobile data services and fixed-mobile convergence services will increase customers’ need to invest in new telecom equipment. Specifically, Gartner says that the ratio of mobile connections to fixed connections will exceed 4-to-1 by 2012 and that revenue from mobile telecom services will top $1 trillion by 2010. And because mobile data use is expected to expand rapidly over the next five years, Gartner projects that the telecom equipment segment will see a compound annual growth rate of 8.7% between now and 2012, as customers invest in new technology that will support their mobile bandwidth and fixed-mobile convergence requirements.

“Our breakdown of services clearly shows that fixed voice is in decline, but mobile voice, though currently growing, will also stagnate as a proportion of the market by 2012,” says Gartner analyst Will Hahn. “The baton has clearly been passed to data services in the legacy sector.”

While telecom revenue is projected to see solid growth this year, Gartner also projected last month that spending on both telecom services and IT in general would slow worldwide in 2009. Telecom spending, which accounts for more than half of all IT spending worldwide, will grow by a projected 6% and will total nearly $2.1trillion in 2009. Spending on software (8% projected growth in 2009) and IT services (7% projected growth in 2009) will be the fastest-growing services next year, while computing hardware spending is projected to slow to just 4% growth next year, down from 10% spending growth on hardware worldwide in 2007.