Telecom will grow by double digits through 2000

Aug. 1, 1997

Telecom will grow by double digits through 2000

The Telecommunications Industry Association (tia) and the MultiMedia Telecommunications Association, both in Arlington, VA, predict double-digit growth for telecommunications through 2000, based on data compiled for the recently issued 1997 MultiMedia Telecommunications Market Review and Forecast.

OThe 1997 Market Review clearly demonstrates the overall health of the industry,O comments Matthew J. Flanigan, tia president. OThe 1996 growth figures for telecommunications equipment are good news not only for emerging technologies, but also for core markets such as pbx [private branch exchange] and internetworking equipment.O

The study pegs the overall telecommunications market in 1996 for equipment and services at $298 billion, an 11% increase from the previous year. Services accounted for 75% of this total, but its 9% increase was overshadowed by the 17.8% increase in 1996 equipment sales. The fastest-growing sectors in the equipment market included computer/telephony integration, wireless, and Integrated Services Digital Networks. However, virtually all categories posted what were termed Osignificant increases.O

Several factors fueled telecommunications? banner year, according to the survey. The changing structure of the U.S. economy, which saw a significant amount of corporate downsizing, forced employees to rely on telecommunications technology to do more work with fewer resources. Information also became a critical competitive factor. Meanwhile, technology advances enabled the transmission of more data at faster rates, with the Internet leading the way toward new demands for bandwidth. Finally, improvements in interoperability provided new multimedia services effectively and economically.

Highlights of the study include:

YENetworking services?Local service revenues increased 7.6% to $49.6 billion, while toll-service revenues rose 6.2% to $89 billion. This latter number is expected to increase to $119.5 billion by 2000.

YENetwork equipment?The conversion from analog to digital and from electromechanical to electronic transmission drove equipment spending to $10.2 billion, a 16.6% increase over 1995.

YEVoice communications?pbx sales rose by 11% in 1996, to $3.6 billion.

YEMobile and wireless?Wireless communications services drew $31.4 billion in 1996 sales, up 23.3%. Unlicensed personal communication services and other in-building equipment totaled $99 million in 1996.

YELocal-area and wide-area network technologies?Data communications equipment sales reached $31.4 billion in 1996, a 16.4% jump.

YEComputer/telephone integration?This sector grew to $886 million in 1996, a 46% jump over 1995. The study predicts this area will more than double by 2000, to $2.4 billion.

YEDistribution?The study predicts that Odelivery channel companiesO will become more critical in the future as the computer and communications industries converge. Those companies that can become network integrators will prove the strongest players, according to the study.

1997 MultiMedia Telecommunications Market Review and Forecast can be ordered by calling (703) 907-7472 or (800) 799-6682.

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