U.S. Telecom Business (Overall) is In Surprisingly Good Shape

If you prefer video, an have 40 minutes, you can hear a discussion at a high level of the 2013 Telecommunications Industry Association “Market Review and Forecast.” It’s always useful.

You can watch here.

If you don’t have 40 minutes, here are a couple trends you might find noteworthy. The single biggest takeaway is that the U.S. business is outpacing most other regions, in terms of growth and revenue.

That does not mean every sector of the U.S. business is doing so well, only that the entire business, lead by AT&T and Verizon, is doing surprisingly well. The trend over the last decade has been for the market share leaders to do far better than smaller providers. So scale clearly matters.

There are two other developments of note. Among them: U.S. mobile data revenues have surpassed voice for the first time. You knew it was coming, and it has finally happened.

In 2012, for the first time in the history of U.S. mobile communications, customers spent more money on mobile data services ($94.8 billion) than on mobile voice services ($92.4 billion), the Telecommunications Industry Association now says.

That primarily is significant for those in the service provider segment of the business.

At a high level, the key managerial task is growing the essential data revenues business, which represents the future, while maintaining voice revenues at the highest possible level, for as long as possible.

For many on the supplier side of the industry, the key trend is that U.S.service provider capital investment is accelerating, and will grow at a 34 percent rate over the 2013 to 2016 period.

In 2012, U.S. wireline spending was $39.1 billion, compared with $27 billion for wireless infrastructure. By 2016, wireline spending is expected to climb to $44.4 billion, while wireless will reach $38.4 billion.

If the prediction proves correct, industry suppliers are headed for four “fat” years, after that recent “lean” years.

The TIA reports that although overall global telecom industry revenue growth decelerated to seven percent, down three percent from 2011 levels, revenue growth actually accelerated in the U.S. market from 5.9 percent in 2011 to 6.2 percent in 2012.

TIA predicts this trend will accelerate in the years ahead – with mobile data spend hitting $118.6 billion in 2013 (versus $86.4 billion for voice) and $184 billion by 2016 (versus $70.1 billion for voice).

Additionally, U.S. wireless penetration jumped over 100 percent in 2012, growing to 102.5 percent for the year. TIA predicts that wireless carriers will add 40.3 million subscribers over the next four years, for a penetration of 111.3 percent in 2016.

TIA predicts U.S. revenue growth rates of 7.1 percent in 2013 and 6.8 percent in 2014, while international markets will see rates of 7.9 and 6.5 percent, respectively.