$25.6 Trillion Telecom Industry Revenue in 2016? Absolutely No Way

Insight Research predicts that wireless revenues will jump from 60 percent of all telecommunications services in 2008 to 72 percent in 2013, which amounts to a 14.4 percent compound annual growth rate.

The Asia-Pacific region will experience the highest growth rate in the next five years, at nearly 16 percent, led by China and India. The telecom sector in Latin America and the Caribbean will grow by 12 percent.

Insight Research also apparently believes telecommunications services revenues on a worldwide basis will grow at a compounded rate of nine percent over the next five years, bringing the sum spent globally on telecommunications to $25.6 trillion, a figure that some will consider wildly optimistic. If one counts all sorts of activities that have some relationship to communications (voice and data), plus all video entertainment, plus the value of data networking services and products, one likely could get to a number that big. See http://www.zimbio.com/New+York+News/articles/rbJJYS2aT3r/Insight+Research+Worldwide+Telecom+Industry.

But service provider revenues will not reach anywhere close to that figure. Global telecom services revenue reached $1.5 trillion in 2006, for example. To the end of 2011, growth is projected to slow to a five-year compound annual growth rate (CAGR) of 4.2 percent. See http://www.prlog.org/11216402-global-telecom-market-status-and-forecast-2006-2011.html.

Assume for the sake of argument that the $1.5 trillion 2006 figure was correct. An eight-percent annual growth rate would result in global revenue of $2.2 trillion by the end of 2011. Or assume a baseline of $2 trillion in 2006, a figure that might be considered on the high side for that time period.

That would result in a global market of $2.9 trillion. I do not have access to the full methodology used by Insight Research, but the forecast of $25.6 trillion seems off by an order of magnitude, which means the researchers are including all sorts of other revenue streams arguably related to communications.

In fact, Insight Research's own 2009 forecast of global communications revenue projected "worldwide revenues are predicted to grow from under $1.7 trillion in 2008 to over $2.7 trillion in 2013." See http://www.insight-corp.com/ExecSummaries/review09ExecSum.pdf.

Research companies change methodologies from time to time. Obviously something major has changed in that regard. The new forecasts absolutely cannot reflect service provider revenues alone. But one might ask whether such major "lumping" of multiple revenue sources from multiple industries actually provides much analytical clarity.

Telecom outlook 2011 Gartner