U.S. businesses will spend $154 billion for telecommunications services in 2012, growing to $184 billion by the close of 2016, representing a compound annual growth rate (CAGR) of 4.8 percent over the forecast period, according to Insight Research.
Significantly, business spending for cellular and other wireless services is creating all of the business revenue growth, the firm says.
While U.S. business spending for wireline services is essentially flat over the five year forecast horizon, wireless expenditures are expected to grow at a compounded rate of 9.4 percent from 2011 to 2016, Insight Research forecasts.
Four vertical industries, including wholesale trade; financial, insurance, and real estate services; professional business services; and communications, accounted for 68 percent of total business telecom expenditures in 2011.
Of course, one might also note that consumer spending is shifting to wireless as well.
Insight Research also predicts that global telecommunications services revenue will grow from $2.1 trillion in 2012 to $2.7 trillion in 2017 at a combined average growth rate of 5.3 percent.
Wireless subscriber growth, particularly in Asia and other emerging markets, will raise wireless revenues by 64 percent from current levels, while wireline revenues show only modest growth.
Nearly all of the growth in both sectors is expected to occur in broadband services, with wireless 3G and 4G broadband services projected to grow at a compounded rate of 24 percent over the forecast period and wireline broadband services projected to grow at a 13 percent compounded rate over the same forecast horizon, the companypredicts.
If Insight Research is correct, U.S. service provider revenue could double in just the next five years. The firm reports that predicts that, between 2011 and 2016,, North American carrier revenue will rise from $287 billion to $662 billion, representing 11 percent compound annual revenue growth. That’s about as aggressive a forecast as you are likely to find.
That rapid growth, on a compound basis, would lead to a doubling of industry revenue in five years. That doesn’t mean providers in every segment will benefit equally. But a forecast that large would have to assume that most of the growth would have to occur at the largest firms, which represent 80 percent of total industry revenue.
The smaller providers cannot reasonably contribute enough aggregate revenue to tip the needle at such a large scale, even with even-higher rates of growth than 11 percent, compounded.
Global carrier revenue is expected to achieve a nine percent compound annual growth rate from 2011 to 2016, growing to a total of $5.13 trillion, according to Insight Research Corp.
The forecast explicitly assumes that North American service providers successfully will grow new revenues at a rate fast enough to compensate for weakening voice revenues, for example.
See Insight Research findings here
In terms of segment revenue, the latest forecast projects a 45 percent CAGR for global wireless broadband revenue, 14 percent for fixed-line broadband, about six percent growth for narrowband wireless services and negative three percent revenue change for fixed network narrowband services.
One way to look at the structure of the global market is to note that, by 2016, wireless broadband will account for about 28 percent of all communications service revenue. Narrowband wireless services will account for 38 percent of global revenue. Altogether, wireless will represent 66 percent of total industry revenue.
Fixed-line broadband will account for 11 percent of global revenue, while fixed-line narrowband services will represent 23 percent of total revenue. In aggregate, fixed line revenue will account for 34 percent of total service provider revenue, on a global basis.