Telecom Industry Touts Growth

By Caron Carlson  |  Posted 2006-02-15
The telecommunications industry tooted its own horn Feb. 15, announcing that total spending in the industry grew 8.9 percent in 2005 and predicting that it will grow 10.2 percent this year.

According to the Telecommunications Industry Associations annual look at spending in the sector, the industry spent an estimated $856.9 billion last year.

The industry is still climbing out of the economic slump that dogged much of the technology sector for several years, and telecom executives are eager to tout increases in sales.

The sale of networking equipment fell 71 percent from 2000 to 2003, but it is now on the rise, according to the 2006 Telecommunications Market Review and Forecast.

"The statistics in our new report reveal the telecom industry is expanding once again," said Matthew Flanigan, TIA president.

"The U.S. market is back on an upward path and the international markets are growing even faster."

Telecom equipment and software sales rose 5.4 percent last year to $165.7 billion, with the sale of wireless devices accounting for much of the growth.

Companies are also spending more on fiber optic cable to accommodate increasing traffic levels.

After hearing predictions of it for the better part of a decade, convergence in enterprise networking is beginning to take hold, according to the report.

With IP equipment and IP-based services starting to replace older technologies, the enterprise equipment market rose 6.9 percent.

TIA predicted that growth in video-conferencing and unified communications will drive further enterprise telecom spending.

The sector of telecom that remains on a downward slope is landline services, which fell for the fifth year in a row while wireless services grew in the double digits, according to TIA.

The association predicted that the rate of decline in landline services will begin to taper off as more subscribers seek VOIP (voice over IP) services.

Check out eWEEK.coms for the latest news, views and analysis on voice over IP and telephony.

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