Bundling and data the key drivers for telco growth

Data and web services are expected to be the driver of telecoms growth over the next four years, the TIA 2008 Market Review and Forecast study has predicted. On the wireline side, growth is being driven by VoIP deployment and video. The report pointed to an even more profound switch to IP services for wireless networks--thirty five percent of U.S. wireless service revenue will come from data services, up from 16% in 2007.

Bundling has quickly emerged as the most profound consumer change with 40 percent of all customers now in a bundle, up from 14 percent in 2005 and expected to rise to 82 percent by 2011. Such a strong switch to multiple services makes in increasingly difficult for pure-play operators like Vonage to grow.

"Voice communications, the heart of the industry, is almost an afterthought now," one of the reports authors, Arthur Gruen, said. "The action is on the data side. Entertainment is a driver. Bandwidth consumption is just booming. It doubled in 2006 and quadrupled in 2007."

Gruen said as recently as 2002 and 2003 there was so much access capacity there would be no need to invest in bandwidth for the foreseeable future. "Well, the foreseeable future lasted less than a decade. Now we are in a situation where, if we don't some significant investment now-- and companies are in fact doing it--we may be running into bandwidth shortages," Gruen said.

For more:
- Telecom poised for strong growth Article [1]

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