Transcript Telecom Today - DePaul University

SOURCE:
TIA
TITLE:
Summary of TIA’s 2006 Telecommunications
Market Review and Forecast
AGENDA ITEM:
Opening 4.8 Joint
CONTACT:
Dan Bart, TIA
gsc11_open_13a4r1
TIA’s 2006
Telecommunications Market
Review and Forecast
Briefing
URL for more information:
http://www.tiaonline.org/business/research/mrf/index.cfm
GSC: Standardization Advancing Global
Communications
Outlook
• Rebound in 2004 sustained
in 2005 – U.S. up 8.9%,
international rose 11.4% and
global grew 10.6%
• U.S. growth projected at
9.0% compounded annually,
international at 10.4% and
global at 10.0%
• Global market will reach
$3.9 trillion in 2009 -- $1.2
trillion in the U.S. and $2.7
trillion internationally
Global Telecommunications Revenue
($ Millions)
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2000
2002
United States
2004
2006
International
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Communications
2008
Global
2
Growth Drivers in
2005
•
•
•
•
•
•
Broadband
Wireless
IP technology
Public network equipment
Professional services
Latin America, Asia/Pacific, and Middle
East/Africa led international growth
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Communications
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U.S. Market in
Transition
• Telephone becoming a component of a bundled service
of local/long distance, broadband and TV
• Internet becoming a platform for voice -- VoIP
• Wireless carriers focused on boosting ARPU –
promoting new applications and new devices
• Convergence taking off at the enterprise – IP
equipment replacing legacy technologies
• For enterprise data transport, IP VPNs surging and
legacy technologies fading
• Rebound in fiber deployment
• Landline declining
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The Competitive
Landscape
• RBOCs and MSOs are principal
competitors for landline subscribers
• Competition driving down broadband
prices, spurring RBOC entrance into TV
market and MSOs to wireless alliances
• Demand for IP systems to improve
productivity and for CTI and other
applications to enhance customer
relations
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Impact of Competition
• RBOCs and municipalities investing in fiber
• Enterprises buying IP equipment
• Variety of competing broadband platforms –
BPL, WiMAX, 3G, Wi-Fi, others
• New wireless applications driving device
spending
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Key Policy
Developments
• RBOCs do not have to share highspeed infrastructure with CLEC
competitors and ISPs
• UNE discounts phasing out
• Approval of major landline and wireless
mergers
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Policy Implications
• Facilities-based providers best positioned to
compete
• RBOCs stepping up investment in DSL and
fiber
• Rulings on broadband networks set the stage
for RBOC entrance into TV distribution, while
legislative efforts try to speed it up
• Traditional long-distance companies out of
the market – the standalone long-distance
business model no longer works
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Network Equipment
• After falling by 71%
between 2000 and 2003,
spending rose by 31%
during past two years
• Rebound in fiber spurred by
RBOC entrance into TV
• Increased traffic will
stimulate further investment
• Growth will average 5.2%
to $24 billion in 2009, still
less than half the total in
2000 but 61% higher than
in 2003
Network Equipment ($ Billions)
60
50
40
30
20
10
0
2000
2002
2004
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Communications
2006
2008
9
Broadband
• Broadband passed
dial-up in 2005
• RBOC-MSO
competition driving
down broadband
prices
• Demand for highvolume applications
– music, video
games, movies –
fueling growth
Internet Subscribers (Millions)
80
70
60
50
40
30
20
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Broadband
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Dial-Up
10
Voice over IP
• Market driven by
expanding broadband
universe, low prices,
and range of features
• E911 issue
• VoIP will help stem
landline erosion
Residential VoIP Subscribers
(Millions)
18
16
14
12
10
8
6
4
2
0
2003
2004
2005
2006
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2007
2007
2009
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IP Equipment
• IP-PBXs replacing
traditional PBXs
• KTS owners trading
up to IP-PBXs
• Centrex users shifting
to IP-PBXs
• Need to replace aging
equipment is spurring
migration to IP-PBX
PBX/KTS Revenue ($ Billions)
6
5
4
3
2
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
IP/Converged
Traditional PBX/Key
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PBX Installed Base
• IP seen as a way to
improve efficiency
• Standards-based
architecture promotes
competition
• Easy to install, easy
to move
• Unified messaging
• IP installed base to
pass traditional in
2008
PBX Installed Base (Millions of
Lines)
70
60
50
40
30
20
10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Traditional
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IP/Converged
13
Data Transport
• VPNs beginning to
cut into leased line,
frame relay, and
ATM market
• Cost savings
• Scalability
• Accessibility
Data Transport Revenue ($ Billions)
30
25
20
15
10
5
0
2004
2005
2006
IP VPNs
2007
2008
2009
Legacy Technologies
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Wireless
• Still room for expansion
but subscriber growth will
slow in percentage terms
to 8.5% annually
• Penetration will increase
from 66% in 2005 to 88%
in 2009
• Revenue will grow at
11.2% annually fueled by
3G, new applications,
bigger plans
U.S. Wireless Market
300
250
200
150
100
50
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Subscribers (Mil)
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Revenue ($Bil)
15
Landline
Developments
• RBOCs are now the major long-distance providers
• Standalone long-distance carriers are leaving the market
• CLECs without their own facilities are investing in their
own equipment or leaving the market
• Cable operators are major competitors
• Broadband is now offered in a bundle with telephone
service
• VoIP is becoming popular
• Television is becoming a necessary component in a
service bundle
• Flat-rate pricing is replacing per-minute pricing model for
long-distance
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Landline Market
• Landline subscribership is
falling
• Subscribers dropping second
lines in favor of wireless
• Broadband cutting into
demand for second lines for
dial-up Internet access
• Some people now rely
exclusively on wireless
• Flat rate pricing will help
landline neutralize wireless
advantage
• VoIP will attract subscribers
to landline
• Landline erosion will
moderate and landline
revenue will stabilize
Landline Market
240
230
220
210
200
190
180
170
160
150
140
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Landline Subscribers (Millions)
Landline Revenue ($ Billions)
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International Markets
• Europe has the world’s
largest market at $931
billion in 2005
• Asia/Pacific in third
(behind the U.S.) at
$630 billion
• Asia/Pacific, Latin
America, and Middle
East/Africa will be the
fastest growing
• Asia/Pacific will pass
the $1 trillion level in
2009 and Europe will
exceed $1.2 trillion
International Telecommunications
Revenue ($ Billions)
1,400
1,200
1,000
800
600
400
200
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Europe
Asia/Pacific
Middle East/Africa
Canada
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Latin America
18
Key International
Drivers
• Governments are actively promoting broadband
and encouraging carriers to upgrade
• Wireless broadband is taking off in Europe
• Wireless subscribership is growing explosively in
Asia/Pacific
• Privatization and increased investment is
boosting Middle East/Africa
• Rising incomes and a stable economic
environment are benefiting Latin America
• Newly launched VoIP, text messaging
interoperability, and mobile music are enhancing
Canada
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International
Internet Access
• Broadband will be the
fastest-growing sector,
expanding at a 28.3%
annual rate
• Countries view
broadband as essential to
compete in the world
economy
• Dial-up growth is also
expected in Latin
America, Asia/Pacific,
and Middle East/Africa,
while dial-up in Europe
and Canada is declining
Internet Access Revenue ($ Billions)
180
160
140
120
100
80
60
40
20
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Broadband
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Dial-Up
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International Wireless
Markets
• Wireless is also a major
catalyst for growth
• There is enormous
potential for expansion,
particularly in China and
India
• Those two countries
alone will add more than
400 million wireless
subscribers during the
next four years
• Except for Europe, which
is saturated, each region
will average double-digit
annual growth
Wireless Subscribers (Millions)
1,600
1,400
1,200
1,000
800
600
400
200
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Europe
Asia/Pacific
Latin America
Middle East/Africa
Canada
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Global Market
• The telecommunications
industry is expanding
again
• The U.S.has returned to
an upward path and
international markets are
growing faster
• Global growth projected
at 10 percent
compounded annually
through 2009
• Spending will rise from
$2.7 trillion in 2005 to
$3.9 trillion in 2009
Global Telecommunications Revenue
($ Trillions)
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2000
2002
2004
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2008
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