Telecommunications

Industry Association (TIA)

Webinar

ICT Is Key Driver for Global Economy

Analysis Based on TIA’s 2010 ICT Market Review & Forecast

Presented by Economist Arthur Gruen and TIA Director for

International and Government Affairs Nick Fetchko
April 28, 2010
 3-5 Year Forecast and
Global in Scope
• Report produced by TIA annually since 1986
• Economists Wilkofsky-Gruen Associates
• Online version through TelecomTV
• Segments information by:
– Geography (U.S., international, global)
– Sectors & services:
• Landline
• Wireless
• Enterprise
• Network equipment
• Broadband
• VoIP
• Data transport
• Internet access
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 Global ICT Market Forecast

Global telecommunications spending will grow at a

6.3% percent compound annual rate to $4.9T in 2013
from $3.9T in 2009.
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 International Market Drivers

• Post-recession recovery 2010-13 dominant driver for

next four years
• Wireless subscriptions will increase 1.4B to 5.5B during
next four years, a cumulative 33% advance.
• Large gains in broadband and wireless penetration will
fuel growth in Asia Pacific
• Surging broadband market and wireless growth will
drive spending in Latin America
• Middle East/Africa will be fastest-growing international
region

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 Overall U.S. Spending

For the forecast period as a whole, growth will average 3.7%

compounded annually to $1.14T in 2013.

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 Overall Non-U.S. Spending

Overall non-U.S. spending will grow $915B to $3.8T in 2013, a

32% increase from 2009.
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 Spending Growth by
Component

In 2009, the equipment market fell much faster than the services
market.
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 Biggest Spenders

The top 12 countries as a group accounted for 47% of total

international telecommunications spending in 2009.
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 ‘Top’ 12 in Broadband

Europe had the top seven countries in the world and 11 of the
top 12 in broadband penetration.
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 Internet Subscribers

Because of the broadband surge during the past four years, dial-
up had 44% fewer subscribers in 2009, and by 2013 there will
be 75% fewer subscribers.
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 BRIC Market Spending

BRIC telecommunications spending will total $954B in 2013,

comprising 25.1% of total international telecommunications
spending, up from 22.8% in 2009 and 16.5% in 2003.

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 U.S. Trade Deficit

The trade deficit, which declined slightly in 2001, has grown in

each subsequent year.
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 Overall European Spending

For the forecast period as a whole, the overall telecommunications

market will increase at a 4% compound annual rate to $1.31T in
2013.

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 The European Market

During 2009-10, equipment will fall 5.8% on a compound annual

basis, while services spending will continue to grow, although at a
modest 1.6% compound annual rate.

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 European Broadband Access
Revenue

Broadband access spending will increase from $59.7B in 2009

to a projected $87.5B in 2013, a 10% compound annual
increase.
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 IPTV Spending in Europe

We project IPTV spending in Europe to increase from $3.7B in

2009 to $8.9B in 2013, a 24.7% compound annual gain..

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 Spending in Latin America

Overall growth for Latin America is projected to be 8.6% in 2010.

Even faster growth of 10.7% is predicted for 2011 as the
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economy expands.
 Latin America Wireless Growth

We project wireless spending in Latin America to increase at a

9.3% compound annual rate to $134B in 2013 from $94B in
2009.
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 Overall ICT Spending in Middle
East/Africa

Overall telecommunications spending will rise to $395B in 2013,

growing at a 12.1% compound annual rate, the fastest growth in
terms of percentage of any region.
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 Overall ICT Spending in Asia

For the 2010–13 period, the overall telecommunications market

is set to expand at an 8.5% compound annual rate, rising to
$1.5T from $1.1T in 2009.
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 Wireless Subscriber Growth

A projected 340 million increase in India and a 300 million

advance in China will bringing total subscribers in the two
countries to 1.89 billion by 2013, 62% of all wireless subscribers
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in Asia Pacific.
 Wireless Spending in Asia

During the 2010–2013 forecast period, wireless spending growth

in Asia Pacific will average 10.5% on a compound annual basis,
with spending rising to $415.5B in 2013 from $279B in 2009.
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 Broadband Penetration in Asia

We project the number of broadband subscribers to rise to 160

million in China by 2013, accounting for 64% of the total
projected growth in broadband subscribers in Asia Pacific..
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 Asia Broadband Spending

Broadband access spending totaled $31.4B in 2009, a figure we

project will rise to $45.9B by 2013, a 9.9% compound annual
increase..
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 Equipment Spending in Asia

Spending on wireless devices overtook spending on public

network equipment in 2008 and is now nearly as great as
spending on enterprise equipment.
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 International Policy Priorities

Trade

- Pending FTA’s with Korea, Colombia, Panama

- Trans Pacific Partnership
- National Export Initiative
- Watching Key Cases
– U.S.-EU dispute over WTO Information Technology Agreement
– U.S.-Brazil Cotton Dispute – Possible cross retaliation on U.S. IPR

- Annual contributions to annual 1377 Review Process and National Trade

Estimate

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 International Policy Focus:
China
China
-TIA support of USITO

Policy interests
– Indigenous Innovation
• WAPI
• TD-SCDMA
• Indigenous Innovation Product Accreditation
– Type Approval
– Telecom Law

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 International Policy Focus:
India
India
- U.S.-India ICT Working Group

Policy Interests
- Telecom Equipment Security Approval Regulations and Technology
Transfer Requirement
- 3G and BWA Auctions
- Licensing and regulatory issues (VoIP, license fee disparities,
Remote Access, etc.)

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 Research Methodology

1. Reference unbiased, respected third-party sources

2. Identify underlying economic, technological, regulatory
and competitive factors
3. Develop models to quantify impact of factors on industry
revenues
4. Create forecast scenario for each causative factor and
assign relative significance weight
5. Apply proprietary mathematical models and algorithms to
compute range of prospective results
6. Tune the results based on professional expertise and
institutional knowledge
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 How To Order

TIA’s 2010 ICT Market

Review & Forecast
Mobile and Wireless
Communications
Chapter Is Available
Today

http://www.tiaonline.org/market_intelligence/mrf/index.cfm

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 TIA: A World-Recognized Authority

ƒ Since 1924, TIA has represented the global information

and communications technology (ICT) industry
ƒ Works through Policy, Standards, Environment,
Intelligence and Networking
ƒ 3,000 TIA standards developed, including:
ƒ New Committee: Smart Communications Devices

ƒ Data centers and Cat 5/Cat 6 cabling

ƒ Cell towers and CDMA technology

ƒ CALEA and P25

ƒ Ethernet

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 TIA Board of Directors
ƒ Recognized leadership
ƒ Advances association mission

ADTRAN | Alcatel-Lucent | ANDA Networks | AttivaCorp | Cisco

Systems | Ericsson, Inc. | GENBAND, Inc. | Graybar | Henkels & McCoy
| ILS Technology | Intel Corp. | Intersect, Inc.| LGE | Microsoft | Nokia
Siemens Networks | Openwave, Inc. | Panasonic Computer Solutions
Co. | Powerwave Technologies| Qualcomm | Research In Motion |
Sumitomo Electric Lightwave Corporation | Tellabs | Tyco Electronics |
Ulticom, Inc. | Wirefree
Advisors to the Board: FAL Associates | Orca Systems | Telcordia
Technologies

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 TIA’s Policy Agenda

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 Thank You!

Contact TIA at
msnyder@tiaonline.org

tiaonline.org

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