According to a recent report by the Telecommunications Industry Association there should be a fall of 27 percent this year in US spending on access equipment and a continuing drop over the next two years before it starts to grow again, even though there is an expectation of broadband stimulus funds in the next few months by the Federal Government.
It is predicted that there should be a global telecom industry decline this year for the first time ever, with a drop of 3.1 percent followed by a growth next year of 1.2 percent, a fall of 9.8 percent in 2010 and 3.2 percent in 2011 of projected access equipment, followed by a growth in 2012 of 18.2 percent, according to the report from the TIA. The TIA said that in total over the next three years there will be a fall of over $3.2 billion (or 36 percent) in the domestic broadband equipment market.
In a recent email a principle author of the report, Arthur Gruen wrote “The declines in 2009-10 and the increases in 2011-12 reflect slower growth in broadband subscriptions during the next two years and accelerating growth during 2011-12 in response to the economic cycle. With the stimulus not expected to hit the market until 2010 and its impact occurring over the course of the year, we expect the decrease to be noticeably moderate in 2010. With the full impact to begin to be felt in 2011, we are projecting double-digit growth in DSL and cable that year and an overall 18% increase across all categories in 2012.”
Grant Seiffert, the president of TIA was asked about the impact of the broadband stimulus effort on the industry recently, he said “It’s obvious that broadband stimulus funding will be focused on jobs and hiring folks to do the trench digging, the tower building, the antenna fixing. Those are the obvious areas that will be impacted directly.”
With the country’s largest deployer of FTTP, Verizon Communications, completing its plans for rollout in the next two years, a drop-off in fibre-to-the premises (FTTP) equipment, which accounts for over half of the spending last year on broadband equipment in the US, this appears to be another factor in the coming decline of the access market. These plans may, however be slightly expanded said the company. Spending on FTTP equipment in the US should drop for last years peak of $4.6 billion to a low in 2011 of $1.3 billion, which equates to a drop in just three years of 72 percent before 2012 sees it growing again to 1.7 billion.