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%

What Drives Data Center "Location?"

Data center markets generally are defined by metro area, when describing capacity. End user demand has something to do with those locations. Internet usage and computing demand obviously are greatest in highly-populated areas. People and businesses tend to drive economic activity and therefore internet usage, which drives the need for cloud computing and data center capacity. 

But actual locations are driven by a variety of other considerations, including access to major global optical fiber backbones, internet exchange points, electrical power cost, land costs, labor force skills and a variety of other issues ranging from political stability to data privacy laws or government mandates. 

Rank	Data Center Market	Capacity (MW)	Region
1	Northern Virginia, USA	2,552	North America
2	Beijing, China	1,799	Asia Pacific
3	London, UK	1,053	Europe
4	Singapore	876	Asia Pacific
5	Tokyo, Japan	865	Asia Pacific
6	Frankfurt, Germany	864	Europe
7	Shanghai, China	832	Asia Pacific
8	Sydney, Australia	723	Asia Pacific
9	Dallas, USA	620	North America
10	Silicon Valley, USA	566	North America
11	Amsterdam, Netherlands	564	Europe
12	Paris, France	537	Europe
13	Chicago, USA	504	North America
14	Miami, USA	421	North America
15	Toronto, Canada	398	North America
16	Seoul, South Korea	381	Asia Pacific
17	Hong Kong	372	Asia Pacific
18	Dublin, Ireland	367	Europe
19	Frankfurt/Rhein-Main, Germany	348	Europe
20	Ashburn, USA	342	North America
21	Mumbai, India	337	Asia Pacific
22	Atlanta, USA	335	North America
23	Washington D.C., USA	326	North America
24	Osaka, Japan	323	Asia Pacific
25	Madrid, Spain	317	Europe

source: Visual Capitalist

Generally speaking, “capacity” also is correlated with “revenue,” with the major hyperscalers and largest telcos tending to drive activity. 

Rank	Data Center Market	Estimated Revenue (USD Billion)	Region	Major Players
1	Northern Virginia, USA	50-60	North America	AWS, Microsoft Azure, Equinix, Digital Realty
2	Tokyo, Japan	30-40	Asia Pacific	NTT, KDDI, Amazon Web Services, Google Cloud
3	London, UK	25-35	Europe	Interxion, Equinix, Telehouse, Digital Realty
4	Singapore	20-30	Asia Pacific	Equinix, ST Teleport, Digital Realty, Google Cloud
5	Frankfurt, Germany	15-25	Europe	Deutsche Telekom, Interxion, NTT, Equinix
6	Shanghai, China	15-25	Asia Pacific	China Telecom, China Unicom, Alibaba Cloud, Tencent Cloud
7	New York City, USA	10-20	North America	Equinix, Digital Realty, Verizon, AT&T
8	Paris, France	10-20	Europe	Orange, SFR, Equinix, Telehouse
9	Amsterdam, Netherlands	10-20	Europe	Interxion, Equinix, NTT, Telehouse
10	Sydney, Australia	10-15	Asia Pacific	NextDC, Macquarie Telecom, Equinix, Digital Realty
11	Hong Kong	10-15	Asia Pacific	PCCW, HKBN, Equinix, Digital Realty
12	Chicago, USA	10-15	North America	Equinix, Digital Realty, NTT, AT&T
13	Miami, USA	8-12	North America	eNAP, Equinix, Digital Realty, NTT
14	Dublin, Ireland	8-12	Europe	Interxion, Equinix, Telehouse, Digital Realty
15	Washington D.C., USA	8-12	North America	Equinix, Digital Realty, Verizon, AT&T
16	Los Angeles, USA	8-12	North America	Equinix, Digital Realty, NTT, AT&T
17	Frankfurt/Rhein-Main, Germany	8-12	Europe	Deutsche Telekom, Interxion, NTT, Equinix
18	Ashburn, USA	8-12	North America	Equinix, Digital Realty, NTT, Amazon Web Services
19	Mumbai, India	8-12	Asia Pacific	Reliance Jio, Adani Connex, ST Teleport, Equinix
20	Toronto, Canada	6-10	North America	Equinix, Bell Canada, Rogers Communications, CGI
21	Seoul, South Korea	6-10	Asia Pacific	SK Telecom, KT Telecom, LG Uplus, Equinix
22	Atlanta, USA	6-10	North America	Equinix, Digital Realty, NTT, Google Cloud
23	Osaka, Japan	6-10	Asia Pacific	NTT, KDDI, Google Cloud, Equinix
24	Madrid, Spain	6-10	Europe	Telefonica, Vodafone, Equinix, Telehouse
25	São Paulo, Brazil	6-10	Latin America	Oi, Vivo, Claro, Equinix, Ascenty