Wireline Data Spending Declines in Recession, Report Finds

 
 
By Nathan Eddy  |  Posted 2009-11-17 Email Print this article Print
 
 
 
 
 
 
 

The economic recession is taking its toll on wireline data spending among U.S. businesses, but is expected to rebound in the coming years, a report by In-Stat finds.

A report from market research firm In-Stat found spending on wireline data services by U.S. businesses this year is falling across nearly every category, with the exception of IP VPN and Ethernet services. Overall, In-Stat expects a nearly 2 percent decline in U.S. business spending on wireline data services, which represents the first time this market has declined in the 10 years the company has been tracking it.

In-Stat found spending on wireline data services by U.S. enterprises (1,000+ employees) is on track to decline from $23 billion in 2008 to $22.4 billion in 2009, though research suggests spending will stabilize in 2010 before returning to growth reaching $25 billion by 2012.

Spending on IP VPN services by U.S. small businesses (5-99 employees) is projected to grow from about $100 million in 2008 to over $250 million in 2012. Among vertical segments of U.S. enterprises, research showed government represents the largest segment. Additionally, spending on Ethernet services among health care firms will see some of the strongest growth, nearly tripling from 2008 to 2012.

The report, "U.S. Business Spending by Size of Business and Vertical: Telecom-Wireline Data Services," provides forecasts of U.S. business telecom spending for the 2007-2013 period, with segmentation by product category, size of business and vertical market. Detail is included for the following wireline data services: ATM, frame relay, Internet access, private line, and the aforementioned IP VPN and Ethernet services.

Wireline data services include expenditures on wide area network (WAN) data transport services, as well as dedicated Internet access (which includes cable and DSL), network-based IP VPN, private line, frame relay, ATM and Ethernet services. The category does not include managed services, such as hosted IP telephony, LAN infrastructure, security and other managed solutions, which are tracked separately by In-Stat.

In-Stat analyst David Lemelin said Ethernet services and IP VPN services are among the lone bright spots in the market. "Spending on ATM, frame relay and private-line services is particularly weak, declining about nearly 10 percent from 2008," he said. "Among the vertical business markets, the professional services and health care segments are faring best, but even these are only flat year to year."

The company is offering the report, which includes forecasts broken down into four size-of-business segments (from small office/home office, or SOHO, to large enterprises) and 10 vertical markets, including transportation, retail trade, finance, insurance and manufacturing, for $15,000. The report is provided in pivot table format, which allows clients to review forecasts by any vertical industry segment within any size of business category, or by any size of business segment within any vertical category.

 
 
 
 
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.
 
 
 
 
 
 
 

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