Demand for data to power telco revenues over next 5 years

IDC estimated that worldwide spending on telecommunications services and pay TV services rose 1.4% year over year (in constant dollar terms) to reach $1.66 trillion in 2017. This will accelerate to 1.6% in 2018, bringing worldwide spending to $1,689 billion.

The market is forecast to continue its positive growth until the end of the five-year forecast period (2018-2022), growing at a compound annual growth rate (CAGR) of 1.1%.

This stable positive trend will entirely be a consequence of increasing demand for data services.

“The global telecoms market will maintain steady growth of 2% over the forecast period of 2018-2022. Communications service providers are in transition, facing a flat voice market, but steady growth in fixed and mobile data services,” IDC group vice president for worldwide telecommunications research Courtney Munroe said.

“Fixed data services will grow by 4% due to strong demand for broadband, Ethernet, and high-speed fiber connectivity. While mobile voice revenues are declining, this sector will be sustained by strong growth in data and other services.”

While the Americas will maintain dominant share during the forecast period, Asia-Pacific will see its share increase from 32% to 34%.

“The Asia-Pacific market is growing faster than other regions due to the thirst for data services – spending on fixed data services is set to grow by 6% over the forecast period, which is significantly higher than other regions and this, coupled with mobile data growth, is driving the overall market growth,” said Eric Owen, group vice president, EMEA telecommunications & networking at IDC.

The single-digit growth rates clearly show that the worldwide market for telecoms services has matured. This situation requires changes on the supply side.

Denise Lund, IDC’s research director of mobile enterprise research, believes that “growth in telecom revenues requires innovative strategies and tactics and a steadfast approach to the market. Establishing and growing a base of connections has never been more challenging, yet it is critical to communications service providers that want to claim a stake in the future revenue growth opportunities.”