Study: World telecom market set for 6 percent growth

Global telecommunications revenue are growing at 6 percent per year and will rise from around US$1 trillion this year to $1.3 trillion in 2007, according to a report to be published next week by Pyramid Research Inc.

This is a healthy growth rate, Pyramid said, noting that it is greater than that posted by the U.S. energy industry, most parts of the manufacturing industry, health care and transportation industries over the past 10 years.

Connections are rising faster than revenue, with global mobile connections growing by 9 percent per year, and broadband connections by 25 percent per year, according to Pyramid. This means that ARPU (average revenue per user) will gradually fall over the next five years, creating a "margin crunch" for operators.

But growth rates will differ widely from region to region and between different countries in each region, according to Pyramid. Revenue in emerging markets is growing three times faster than that in developed markets -- 12 percent compared to 4 percent -- and vendors need to have a focused strategy for those high-growth markets, particularly China, India and Russia, Pyramid said.

Varying growth rates between regions will mean that global telecommunications spending in 2007 will show a considerably different pattern from that noted in 1999, Pyramid said.

In 1999, North America accounted for 36 percent of telecommunications revenue, ahead of Western Europe with 29 percent and Asia-Pacific with 23 percent. In 2007, Asia-Pacific will be the biggest market with 35 percent of telecommunications revenue, ahead of North America's 30 percent and Western Europe's 19 percent.

Central and eastern Europe will almost double its percentage of global revenue, from 3 percent in 1999 to 5 percent in 2007, Pyramid said.

The report, titled "Worldwide Telecoms Revenue Forecasts and Analysis 2002

ITworld.com

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