Is Business Connectivity Spending Growing?

The 5G era might represent a significant change in telecom market dynamics. Where consumer demand for internet access arguably has driven revenue growth for the past couple of decades, growth might shift to enterprise and business users.

The reasons are several. Though nearly all connectivity markets are competitive, and face pressures to reduce prices, almost continually, cloud computing and internet of things arguably will increase demands for business connectivity, virtually across the board.

On the other hand, substitution effects never can be discounted. Nor can we discount the growing ability to substitute lower-cost computing platforms for higher-cost platforms, which means quality goes up even as costs remain flat or even decrease. That means spending levels do not always linearly relate to demand.

And it always is difficult to tell whether U.S. business spending on telecommunications is growing or shrinking, in part because different forecasters use different definitions of what “telecom spending” includes. Nevertheless, several analysts now predict steadily-growing U.S. business spending on telecommunications.

With the caveat that “North America” often includes the United States and Canada, or, perhaps as appropriately, those nations plus Mexico, spending on communications services seems to be on an upward trajectory.


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