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John MacAyeal

Healthy growth forecast for telecom industry

by John MacAyeal | Dun & Bradstreet Editor

January 17, 2012 | 1 Comment »

The telecom industry may be one bright spot in a troubled world economy. While global growth is forecast by The Conference Board to grow at about 3% annually from 2012 to 2016, worldwide telecommunications services revenue is projected to increase from $2.1 trillion in 2012 to $2.7 trillion in 2017 at a combined average growth rate of 5.3%, according to a news release announcing a new market research report by The Insight Research Corporation.

Demand from consumers and businesses for wireless services is reportedly fueling that industry revenue growth. Geographically, Asia and other emerging markets will boost wireless revenues by 64%, while wireline revenues are expected to show only modest growth.

Most of the growth in both the wireless and wireline sectors is expected to come from broadband services, with wireless 3G and 4G broadband services forecast to grow at a compounded rate of 24% from 2012 to 2017. Over the same period, wireline broadband services are predicted to grow at a compounded rate of 13%.

Congruent with the report’s information that Asia and emerging markets will be important for telecom growth, The Conference Board projects that overall gross domestic product (GDP) growth between 2012 and 2016 will be 7% in China, 6.4% in India, and 4.1% in “other developing Asia.”

“Despite global economic uncertainty, the telecommunications industry is showing strong revenue growth, which is being driven by consumer Internet usage and business mobility solutions. These are enabling new applications,” said Fran Caulfield, Research Director for Insight Research.

As the telecom services sector projects growth, so too are mobile phone manufacturers readying next-generation products to drive sales.

At this year’s CES, Verizon Wireless (a joint venture of Verizon Communications and Vodafone) added six new 4G long term evolution (LTE) devices to its expanding list. Sprint Nextel announced plans to launch about 15 4G LTE devices – including handsets, tablets, and data cards – in 2012. AT&T, meanwhile, plans to launch the Xperia ion, a 4G LTE smartphone made by Sony, in the second quarter of 2012. It will be the first smartphone to be sold in the US under the Sony brand.

Additionally, Morgan Stanley reports that Nokia stands to sell up to 37 million Windows phone handsets in 2012 and another 64 million in 2013. Microsoft and Nokia will spend $20 million to promote that product.

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Photo by David Shand, used under a Creative Commons license.