Peak US telecoms industry body predicts first global ICT downturn

Stuart Corner
Saturday, 23 May 2009 03:23

IT Industry - Strategy

For the first time in its 23 years of existence the US Telecommunications Industry Association (TIA) is forecasting a 3.1 decline in the global ICT Industry in 2009. The good news is that it is also forecasting modest growth in 2010 and a strong rebound after that, driven in the US at least by increasing speed and penetration of broadband services.

TIA has just published its 2009 ICT Market Review and Forecast - an annual study it has produced since 1986 - and is predicting a modest 1.2 percent increase in 2010 followed by a 6.4 percent revenue growth in 2011 and a 7.9 percent increase in 2012.

For the US, telecommunications revenue is expected to decrease by 6.4 percent in the next two years, but rebound by 14.4 percent during 2011-12. "The effects of the current Stimulus Package, which carves out investment dollars for broadband, will enable growth throughout the ICT industry and beyond," TIA says.

"Broadband will be a driver for recovery in all areas, from healthcare IT to smart grid technology, public safety networks to education, as well as for businesses and consumers," said Grant Seiffert, TIA president.

He added: "While TIA was instrumental in obtaining the $US7.2 billion for broadband, other funding for energy, health IT and R&D will also spur recovery, especially in reviving some of the hundreds of thousands of jobs lost recently. The sum of increased productivity and revenue amongst all other industry segments whose growth broadband deployment contributes to is often underrated and perhaps immeasurable."

Despite the recession, TIA predicts that wireless and business data revenue will grow by 73 percent during the next four years to $110 billion in 2012 from $64 billion in 2008. "Growth in data traffic will strain network capacity and stimulate investment; availability of financing will fuel investment; and broadband growth will expand the platform for VoIP and IPTV."

TIA's market review and forecast was developed with assistance from economists Wilkofsky Gruen Associates, and that company says demand for high-volume data applications is driving all segments.