NEWS
Tags: 

Telecom revenue growth stalls but datacom accelerates

Global service provider capital expenditure will slow down over the next few years, as telecom revenue growth stalls and the slowdown in Europe continues.

But it’s not all bad news for vendors of optical equipment. Revenue from enterprise networking and communication has accelerated, driven by North America, and this is expected to continue into 2015.

Those are the conclusions of the latest Global Telecom and Datacom Market Trends and Drivers report from Infonetics Research, now part of IHS Inc.

"Overall, growth in telecom revenue continues to slow in every geographic region. Europe's five largest service providers - Deutsche Telekom, Orange, Telecom Italia, Telefónica, and Vodafone - continue to experience declining revenue, though less pronounced than in the past three years. And in North America, AT&T and Verizon have signalled that the mobile services price war started by T-Mobile US is taking a bite," said Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.

Macroeconomic indicators point to moderate global economic growth of 3 per cent for the full-year 2014 due to persistent weaknesses in the Eurozone and a significant slowdown in Brazil and Russia, according to the market research firm.

Service providers are increasingly dependent on their mobile revenues. However, global mobile service revenue barely budged in the first half of 2014 (1H14), up just 0.5 per cent from the same period a year ago, dragged down by a poor performance in Europe again.

Infonetics found that mobile data services (text messaging and mobile broadband) rose again in every region in 1H14, driven by the increasing usage of smartphones. But although mobile broadband services grew 26 per cent year-over-year, this came mainly at the expense of SMS revenue, which declined by a similar amount.

The outlook for the datacom sector is much brighter. "After a weak 2013, enterprise networking and communication revenue growth accelerated in 2014 thanks to a resurging North American market and stepped-up investments in security infrastructure. We expect similar results in 2015, when strong end-user demand in North America and Asia Pacific is likely to be offset by a slowdown in Europe," said co-author of the report Matthias Machowinski, Infonetics' directing analyst for enterprise networks.

Key trends affecting the enterprise networking and communication markets include the adoption of cloud services, the use of cloud architectures in enterprise data centres, and security becoming a part of every IT decision, he says.

Published twice annually Infonetics' market trends and drivers report assesses the state of the telecom industry and looks at what's expected in the near and long term, including spending trends, subscriber forecasts, macroeconomic drivers and key economic statistics, including unemployment, OECD indicators, and GDP growth.

Twitter icon
Facebook icon
Google icon
StumbleUpon icon
Digg icon
LinkedIn icon
Reddit icon
e-mail icon
Feature

CableLabs is spearheading efforts to develop a proposal that uses coherent optics to dramatically boost the capacity of hybrid fibre coaxial networks, reports Andy Extance

Feature

Systems vendors are using intelligent software to squeeze more performance from optical networks. Pauline Rigby reports on developments at OFC 2017