2013/02/04 Telecom sector growth still outpacing GDP growth

ANALYST NOTE

“As we’re ending 2012, Europe’s crisis remains uncontained and is now spreading to Germany. The potential of shaking business confidence everywhere in the world has risen to new heights, and the IMF lowered its growth forecast and is warning of recession risks due to downward revision of global GDP, which now stands at 3.3%. Economic readings are worrisome everywhere but the U.S., but so far the impact on global telecom and enterprise remains tame, and we’re forecasting capex to grow nearly 4% in 2012 over 2011,” notesStéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.

Téral adds: “With the announcement of AT&T’s and Deutsche Telekom’s multi-billion dollar investment plans, next year’s capex outlay looks brighter.”

FUNDAMENTAL TELECOM AND DATACOM MARKET DRIVERS

·                                 Globally, mobile service revenue is the main growth engine in the overall telecom/datacom market, up 4.3% year-over-year in the first half of 2012

·                                 User mobility, specifically BYOD anywhere, is putting pressure on carriers to move to a single network for fixed and mobile access, internet traffic, and private/premium services

·                                 Data traffic growth is outstripping transport equipment costs: traffic is climbing 29% annually while equipment costs are falling 10%

·                                 Software-defined networks (SDNs) are here to stay, but not today: SDNs are on service providers’ minds, but it is a longer-term challenge to find implementations of hybrid SDN and non-SDN in live networks

·                                 The phase out of stimulus monies and pressure on government budgets is decreasing public sector spending and taking a bite out of overall enterprise growth

·                                 With security top of mind due to unprecedented threats and the growing BYOD trend, businesses everywhere are looking to integrate security into everything from smartphones to routers and switches, and are evaluating data center security appliances, cloud security services, and security for virtualized environments and public and private clouds

REPORT SYNOPSIS

Infonetics’ market drivers report is published twice annually to provide analysis of global and regional market trends and conditions affecting service providers, enterprises, subscribers, and the global economy. The report assess the state of the telecom industry, telling the story of what’s going on now and what is expected in the near and long term, including spending trends; subscriber forecasts; macroeconomic drivers; and key economic statistics (e.g., unemployment, OECD indicators, GDP growth). The 40-page report is illustrated with charts, graphs, tables, and written analysis.