market intelligence Where Will It Trend?

By Mike Snyder

There's an old Yardbirds song, "Over, Under, Sideways, Down," with a fitting refrain for these uncertain times. The singer repeats over and over: When will it end?

That's all anyone – make that everyone – wants to know about the economy.

But it's better to be asking: Where will it trend?

TIA has been providing annual market intelligence reports since 1985. This year is no exception. The analysts who are producing the content for TIA 2009 ICT Market Review & Forecast (available in April in PDF format; pre-order today) have been able to encompass the full effects of the global economic swoon on the ICT industry. Not surprisingly, the data show the industry suffering from the effects of the global recession. There's no escaping that fact and trying to wish it away would be irresponsible. However, the outlook isn't entirely grim.

While we anticipate negative growth to continue through 2009, positive growth should return in 2010.

In the overview of the TIA 2009 ICT Market Review & Forecast, Wilkofsky Gruen Associates' Arthur Gruen, writes:

"We expect revenue to fall by 3.1 percent in 2009 and to remain weak in 2010 with a modest 1.2 percent increase. The longer term outlook is much brighter. With the global economy expected to return to an expansion path, we project a strong rebound in telecommunications. We look for revenue to grow by 6.4 percent in 2011 and to improve to a 7.9 percent increase in 2012. While not matching the double-digit gains of the prior three years, the projected increases for 2011–12 represent healthy gains given that the principal drivers of growth during the past few years — wireless and broadband — have or are rapidly maturing in most countries."

Gruen, a principal author of the annual report, will be hosting a series of Webinars in the coming months to share key data with industry leaders. (Dates and times will be added to the TIA Webinar calendar as they are confirmed.)

In the short-term, Gruen points out, ICT companies are at the mercy of the economy with the equipment market vulnerable and financing difficult to obtain. Infrastructure investment can be postponed. On the plus side, investments that offer immediate cost savings or revenue opportunities will hold up well. Video conferencing and Web conferencing are booming, helping companies save money on travel. Also, the migration to IP is continuing.

Services will hold up well over the next two years, Gruen says. Historically, voice services are among the last to be cut in an economic downturn. The Internet is now integral to lifestyle in the United States and much of the world.
Gruen predicts economic recovery during 2011-12 will boost the ICT industry through:

• Pent-up demand for equipment upgrades
• Growth in data traffic that will strain network capacity and stimulate investment
• Renewed availability to financing that fuels investment
• Broadband growth expanding the platform for VoIP and IPTV
• Wireless data driving network upgrades and smart phones.

As broadband stimulus provisions of the American Recovery and Reinvestment Act of 2009 (ARRA) kick in, the prognosis for the ICT industry only improves. In short, the darkness of the hour may signal the dawn of a new era of prosperity.

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Market Review and Forecast (Pre-Order Today)

TIA develops the in-depth research and analysis that companies need to compete in today's dynamic environment. For more than a decade, the TIA 2009 ICT Market Review and Forecast has helped members, government agencies, analysts and the media understand and anticipate market changes. Packed with statistical data, charts and descriptive explanations, this annual resource clearly presents trends, emerging markets, challenges and opportunities in the evolving information and communications technology (ICT) industry. The PDF version will be available in April!