IDC Forecasts Slower Growth for Global Telecommunications Services Market

Published On: May 19, 2024Categories: Buzz

Worldwide spending on Telecom Services and Pay TV Services reached $1,509 billion in 2023, an increase of 2.1% over 2022, according to the IDC) Worldwide Semiannual Telecom Services Tracker, which predicts worldwide spending on Telecom and Pay TV services will increase by 1.4% in 2024, reaching a total of $1,530 billion.

The progress of the global market slowed during the latter half of 2023 as the growth rate recorded for the full year was approximately one percentage point lower than IDC’s previous forecast. This deceleration primarily resulted from slower-than-anticipated progress in the Americas, where a combination of sluggish economic growth, relatively high inflation, and saturated markets created an unfavorable environment for market development. However, in the Europe, Middle East, and Africa (EMEA) region, which faced similar economic issues but where telecom operators were allowed by the regulators to increase their tariffs in line with inflation using a Consumer Price Index (CPI) model, the market grew somewhat faster than expected. 

The five-year outlook for the global connectivity services market remains positive, albeit slightly less optimistic than IDC’s previous forecast. Key central banks in the U.S. and Europe have repeatedly postponed decisions to decrease reference interest rates, impacting the potential for a more robust economic recovery. Consequently, the market environment is expected to remain relatively unfavorable for several more years. 

Persistent inflation will continue to affect the purchasing power of end users but will also prompt many telcos to implement upward tariff adjustments. However, as inflation will continue to gradually decrease, the positive impact of these future tariff increases should diminish over time. The unstable political situation, fueled by conflicts in Eastern Europe and the Middle East, adds further uncertainty and is likely to dampen growth rates. In the Asia/Pacific region, slower growth can be attributed to the cooling down of the Chinese economy. Nevertheless, positive trends are anticipated due to expected healthy growth in India and other developing markets.

Channel Impact®
The development of the connectivity services market remains very slow, but the emergence of AI and advanced analytics will likely provide a powerful stimulus for telecom operators to modernize their business operations and improve efficiencies. 

Stay in the Know

Keep tabs on what’s happening in the channel and the impact it will have on the partner community by subscribing to Channel Impact communications.

Recent News

Search Buzz

Buzz Categories