Will U.S. Telecom Service Revenue Double in Five Years?

Is it possible that U.S. service provider revenue could double in just the next five years? Insight Research Corp. thinks so. The firm reports that predicts that, between 2011 and 2016,, North American carrier revenue will rise from $287 billion to $662 billion, representing 11 percent compound annual revenue growth.

That rapid growth, on a compound basis, would lead to a doubling of industry revenue in five years. That doesn't mean providers in every segment will benefit equally. But a forecast that large would have to assume that most of the growth would have to occur at the largest firms, which represent 80 percent of total industry revenue.

The smaller providers cannot reasonably contribute enough aggregate revenue to tip the needle at such a large scale, even with even-higher rates of growth than 11 percent, compounded. 

Global carrier revenue is expected to achieve a nine percent compound annual growth rate from 2011 to 2016, growing to a total of $5.13 trillion, according to Insight Research Corp. 

The forecast explicitly assumes that North American service providers successfully will grow new revenues at a rate fast enough to compensate for weakening voice revenues, for example. Insight Research findings here 

 In terms of segment revenue, the latest forecast projects a 45 percent CAGR for global wireless broadband revenue, 14 percent for fixed-line broadband, about six percent growth for narrowband wireless services and negative three percent revenue change for fixed network narrowband services. 

One way to look at the structure of the global market is to note that, by 2016, wireless broadband will account for about 28 percent of all communications service revenue. 

Narrowband wireless services will account for 38 percent of global revenue. Altogether, wireless will represent 66 percent of total industry revenue. 

Fixed-line broadband will account for 11 percent of global revenue, while fixed-line narrowband services will represent 23 percent of total revenue. In aggregate, fixed line revenue will account for 34 percent of total service provider revenue, on a global basis.