Showing posts sorted by date for query global telecom revenue. Sort by relevance Show all posts
Showing posts sorted by date for query global telecom revenue. Sort by relevance Show all posts

Tuesday, March 19, 2024

Connectivity Service Provider Revenue Growth to 2025 is About What You'd Expect

Connectivity provider revenue growth between 2024 and 2025 should be about as most would expect, with a global average of about three percent per year, with slower growth possibly in the one-percent range in North America and Europe, with higher growth in the four percent to 4.5 percent range in Asia-Pacific and Latin America, according to S&P Global Ratings.


source: S&P Global Ratings 


To be sure, executives might wish for faster growth rates, but growth rates in mature markets, especially in industries with “utility-type” characteristics, often are slow. 


Industry

Growth Rate (%)

Source

Telecom

3.2%

Deloitte

Passenger Airlines

7.4%

IATA

Seaborne Goods Transport

3.1%

World Maritime News

Retailing

4.1%

Statista

Retail Consumer Banking

2.7%

PwC

Electricity

4.8%

IEA

Natural Gas

2.1%

IEA

Wastewater Services

3.4%

Global Water Intelligence


Though growth rates in various utility-style industries vary over time, none of these industries are early in their adoption curves, when growth is much faster.

source: Corporate Finance Institute 


As the ILC applies to the connectivity service provider industry, while generally mature, segments within the industry that might be likened to “products” can be at different phases of their life cycles. 


The fixed network voice portion of the industry clearly is declining; the home broadband segment growing. The mobile industry routinely introduced a new generation of mobile services every decade, while sunsetting the older legacy generations as that happens. 


Within the mobile industry, growth is fastest in Asia-Pacific and Latin America; slowest in Europe. 


Industry

2000-2005

2005-2010

2010-2015

2015-2020

2020-2023

Source

Telecom

6.5

4.1

2.8

2.3

3.2

Statista

Electricity

3.8

4.2

3.6

2.4

4.8

IEA

Railroad

4.2

5.1

3.8

2.1

2.7

Statista

Aviation

5.8

5.3

4.2

4.6

7.4

IATA


If one looks at computing devices, “personal computing” clearly has moved through a personal computer stage to a mobile phone stage to a smartphone stage. 

The Economist


At a high level, only fixed network voice is clearly in its “decline” phase. Mobile service is expected to continue replacing its lead platform every decade.


Service

Product Life Cycle Stage

Trends

Fixed Network Telecom Service (e.g., Landlines)

Decline

Facing declining use due to substitution by mobile services and internet communication options (e.g., VoIP).  Limited market growth potential.

Mobile Service

Maturity

Widespread adoption and high market penetration.  Focus on differentiation through network coverage, data plans, and value-added services.  Potential for continued growth in emerging markets.

Home Broadband

Maturity/Growth

High market penetration, particularly in developed economies.  Growth potential in developing economies and through offering higher speeds and bundled services.  

Virtual Private Networks (VPNs)

Maturity

Established technology with widespread adoption by businesses.  Potential growth in emerging markets and with increasing security concerns.

Managed Security Services

Growth

Growing demand for cybersecurity expertise and protection against evolving threats.

Data Center Services

Growth

Rising demand for cloud computing and data storage solutions.  Shift from on-premise infrastructure to cloud-based solutions.

Friday, January 26, 2024

What is a Reasonable Growth Rate Expectation for Connectivity Services?

As a rule, utility-type industries and firms (whether formally regulated as public utilities or not) tend to grow at rates just a bit over the underlying inflation rate. So the underlying inflation rate really does matter. 


That might also tend to temper excessive optimism about “telcos becoming techcos” and thereby boosting their growth rates. So long as most of the revenue is earned from supplying the connectivity function, growth rates are unlikely to shift higher. 


But few industries tend to grow at six-percent to nine-percent annual rates, if that is the hope in the connectivity industry. 


Industry

2024 Growth

2025-2028 CAGR

Telecom Services

2.8%

3.2%

Software Development & IT Services

5.8%

6.2%

Applications (Mobile & Web)

8.1%

9.3%

Information Technology (Overall)

3.9%

4.5%

Healthcare

4.2%

4.7%

Retail (E-commerce & Traditional)

4.6%

5.1%

Education (Online & Traditional)

5.5%

6.0%

Renewable Energy & Cleantech

8.7%

10.2%

Financial Services (Fintech & Traditional)

4.9%

5.4%

Manufacturing & Construction

2.1%

2.7%

Transportation & Logistics

3.4%

4.0%


So retail telecom services globally are expected to grow at a compound average growth rate of perhaps 4.9 percent between 2023 and 2028, exceeding inflation rates in most countries (assuming inflation rates decline to around two percent). 


The actual range of forecasts runs from about two percent up to six percent in some cases, with global expectations in the two percent to three percent range, a blend of higher rates in Asia, probably North America and the Middle East and lower rates elsewhere. 


The global electricity market is expected to grow at a CAGR of 3.3 percent between 2022 and 2027, again exceeding inflation. 


The global water utilities market is expected to grow at a CAGR of 3.9 percent between 2023 and 2032, exceeding inflation. 


Likewise, the global waste management market is expected to grow at a CAGR of 4.2 percent between 2022 and 2027, exceeding inflation.


Region

Analyst Firm/Source

Predicted Growth Rate 2024

Predicted Growth Rate 2025-2028 (CAGR)

Global

GSMA Intelligence

2.8%

3.2%

North America

IDC

2.3%

2.9%

Europe

Analysys Mason

1.7%

2.5%

Asia Pacific

Deloitte

4.5%

4.8%

Latin America

Ovum

3.2%

3.8%

Middle East & Africa

Ericsson

4.8%

5.3%

China

China Academy of Telecommunications Research

3.1%

3.5%

India

India Brand Equity Foundation

6.3%

7.1%

Japan

Telecommunications Carriers Association

1.2%

1.5%

Germany

Bitkom

1.9%

2.3%

Brazil

Teleco Síntese

2.7%

3.3%

Nigeria

GSM Association

6.7%

7.5%

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