TIA: Fiber deployments driving industry growth

Total spending in the U.S. telecommunications industry rose 8.9% in 2005, topping $856 billion, according to the Telecommunications Industry Association’s (TIA-Arlington, VA) annual report. Overall spending is expected to increase 10.2% this year, for a total of $944.7 billion. TIA expects the industry to grow at a CAGR of 9% over the next four years, reaching $1.2 trillion by 2009.

Arthur Gruen, principal author of the report, notes that 2005 represented the second consecutive year of high single-digit growth. “2004 was not a fluke year,” he says. “We are now in a period of sustained growth.”

Significantly, the study finds that following a precipitous 71% drop between 2000 and 2003, revenue for the landline network equipment market has risen 31% over the past two years, due almost entirely to increases in fiber deployment. Although it will not regain its prior high levels, the report predicts that fiber revenue in 2006 will climb to more than half of that of 2000, and will be a catalyst for growth rather than for decline.

The report says that fiber deployments increased from 4.8 million miles in 2003 to 10.9 million miles in 2005, with the ILECs responsible for 86% of this increase, upping their deployments from 2 million miles in 2003 to 7.2 million miles in 2005. Over the next four years, the ILECs are expected to deploy an additional 36.1 million miles of fiber. Also, though the bulk of their fiber deployments occurred between 1996 and 2001, MSOs are expected to deploy an additional 5.2 million miles through 2009, primarily for replacement and upgrades.

The report also says municipalities and public utilities deployed 746,000 fiber miles in proprietary broadband network deployments last year, up 23.1% from 2004. Overall, TIA expects spending on fiber to increase from $9.5 billion in 2005 to $12.9 billion by 2009, a CAGR of 7.9%.

For more on the TIA’s “Telecommunications Market Review and Forecast,” visit www.tiaonline.org.

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