April 5, 2017
The global telecommunications services market has experienced decline in recent years, registering a negative compound annual growth rate (CAGR) of 3.4% between 2012 and 2016 to reach a value of US$1.2 trillion, according to data from research firm MarketLine.
The company’s latest report shows that the market declined significantly in Europe and also underwent contraction in Asia-Pacific (APAC). Low growth in the U.S. was not sufficient to offset these reductions, causing an overall decline on a global scale.
“The global telecommunications market has declined in value in recent years as downward price pressure has become an increasing factor,” said Nicholas Wyatt, analyst for MarketLine. “Mobile Internet is now standard in many markets, particularly developed ones, so the only way lots of mobile operators can differentiate themselves from the competition is on price. This has forced prices down and negatively impacted a market that has reached saturation point in many countries.”
The wireless segment was the market’s most lucrative in 2016, with total revenues of around US$775 billion, equivalent to 64.9% of the market’s overall value, meaning the performance of that segment is key to the market’s fortunes as a whole.
MarketLine forecasts an improvement and projects that a CAGR of 2.2% between 2016 and 2021 will drive the market to a value of $1.3 trillion by 2021. Growth will be seen in all regions, with APAC’s lower saturation level contributing to slightly higher rates than those forecast for the US and Europe.
“Subscription volumes have plateaued in recent years, but a slight uptick is expected as populations expand and businesses require increasingly mobile staff,” said Wyatt. “This will help increase values, as will augmented demand for mobile data driven by changes in consumer habits. This is typically the costliest part of a mobile phone contract and should see revenues increase.”