Australian households spend about 3.5 percent of disposable income on fixed and mobile communications services, which points to a major constraint on the connectivity services business: consumers will only spend so much on communications services.
As a percentage of total household income, households spend perhaps 2.5 percent of what they earn on communications, assuming discretionary income is 70 percent of total income.
As a percentage of total household income, households spend perhaps 2.5 percent of what they earn on communications, assuming discretionary income is 70 percent of total income.
Even if mobile subscription growth globally has achieved what once seemed nearly impossible when the only tools we had were fixed networks, long term, telecom industry revenue itself only tends to grow in line with growth of gross national income.
And that means telecom really is a slow-growth industry, not a growth segment of the economy. That also means industry profitability sits on a bit of a knife edge, under conditions where every legacy service is declining, and where substitute products increasingly are available to businesses and consumers.
In the global wide area network segment of the business, for example, enterprises now directly own and operate their own private WANs, carrying a huge share of global traffic. Depending on route, private networks now carry between 20 percent to 70 percent of all traffic on global wide area network routes.
One way of describing that reality is that a business once monopolized by telecom carriers now is driven and lead by enterprises that build and operate their own networks. In that sense, in the global capacity business, relegation to “dumb pipe” status is only the second-biggest business problem service providers now face.
It is the fact that big enterprises can build and operate their own networks, removing most of the potential demand from the market, that is the number-one trend.
Likewise, consumers and households are only going to spend so much of their own incomes on communication or entertainment services, no matter how good.
According to the Australian Bureau of Communications and Arts Research, household spend on mobile and fixed network communications runs about 3.5 percent of of disposable income. 
Of course, all other things are not equal. There is more growth lying ahead in Africa and Asia than in North America and Europe, for example. Eventually, as markets saturate, the correlation with GDP becomes more pronounced.
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