IDC Finds Telecom Spending Gathering Momentum as Telecom Services Revenue Surpasses $1 Trillion This Year

FRAMINGHAM, MA – FEBRUARY 9, 2004 – Worldwide telecommunications services spending will surpass the $1 trillion mark for the first time in 2004, helping the telecommunications industry to re-establish its momentum after several years of slow growth. According to the latest version of the industry-standard IDC Worldwide Telecommunication Black Book, worldwide telecom spending in 2004 will be 4.4% greater than in 2003 and will enjoy a compound annual growth rate (CAGR) of 4.7% from 2003-2007.

"Data offerings will play an important role in driving overall telecom growth, particularly IP-based services such as broadband Internet access and IP VPNs,” said Rena Bhattacharyya, program manager, Worldwide Telecom Markets at IDC. “Nevertheless, the voice market will continue to be a key part of the industry, and will generate more than two-thirds of the industry’s revenue throughout the forecast period."

In 2004 alone, data services revenue will grow 16% over the previous year, and will account for one quarter of the total market. Demand for data services will be strong in all regions, producing a 15% CAGR for total data services worldwide and a 30% CAGR for wireless data services. By 2007, IDC believes worldwide spending on data services will reach $375 billion, led by North America and Asia/Pacific, while wireless data services will grow to more than $150 billion.

Worldwide spending on telecom equipment in 2004 will grow 6% over the previous year to more than $52 billion. IDC expects equipment spending to gradually accelerate throughout the forecast period, achieving an 8.9% CAGR on demand from all regions. North America will account for half of the market, while Asia/Pacific and Western Europe will each contribute one fifth of total spending.

"While a return to positive growth in telecom equipment spending is in line with expectations, the market will continue to be challenging place," said David Emberley, telecom and internet analyst at IDC. "Despite these challenges, equipment providers can still capitalize on a variety of market opportunities by focusing on solutions that support revenue growth, either through greater operational efficiencies or new value-added services.”

IDC’s Worldwide Telecommunication Black Book, 2003: Version 4 (IDC #30757) provides new and updated forecasts for telecommunication spending in more than 50 countries around the world. Telecom spending forecasts for 2002–2007 focus on fixed/wireless, domestic/international, data/voice services spending, and networking equipment spending by enterprise, network service provider, and consumer for countries in all regions.

For more information about IDC’s Worldwide IT Markets program, or to purchase a copy of the 4Q03 Worldwide Telecom Black Book, please contact Amie White at 508-935-4653 or awhite@idc.com.

About IDC

IDC is the premier global market intelligence and advisory firm in the information technology and telecommunications industries. We analyze and predict technology trends so that our clients can make strategic, fact-based decisions on IT purchases and business strategy. Over 700 IDC analysts in 50 countries provide local expertise and insights on technology markets. Business executives and IT managers have relied for 40 years on our advice to make decisions that contribute to the success of their organizations.

IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company. Additional information can be found at www.idc.com.

# # #