Swift recovery drives global connectivity market

Worldwide spending on telecommunications and pay-TV services is forecast to reach $1.5 trillion in 2021, representing an increase of 1.0% over 2020, according to the International Data Corporation (IDC) Worldwide Semiannual Telecom Services Tracker. The latest forecast is more optimistic than the May 2021 forecast as it presumes slightly higher growth (0.3 percentage points) in total market value. IDC credits this positive movement to the quick recovery in the global economy following the Covid-19 crisis.

The fastest expansion is still expected in the Asia/Pacific region where the forecast growth rates have been raised because of the higher-than-expected growth in the Chinese mobile segment in H1 2021. The new forecast for the Europe, Middle East and Africa (EMEA) region is also more positive, driven by full reopening of some major European economies and the introduction of the European Union’s Recovery and Resilience Plan. The outlook for the Americas remains nearly identical to the May forecast as IDC’s expectations on the slow but stable in the United States and other major markets in this region have almost fully materialized in the first half of the year.

Global Regional Services Revenue and Year-on-Year Growth (revenues in $B)

The major trends by type of services are not expected to change over next five years: value of fixed voice and mobile voice services segments will be gradually declining, while the value of fixed data and mobile data services portions will be slowly growing. Some of the habits adopted during the crisis (remote working, collaboration, online media consumption) are expected to remain part of everyday life, so good-quality fixed data connectivity will become an even more critical asset for both households and businesses. The major driver in the mobile segment will be a gradual recovery of roaming revenues fueled by the recuperation of the global tourist industry. The market for traditional pay TV services will continue to decline slowly due to migration of customers to over-the-top (OTT) video services platforms.

The overall market’s growth rates are expected to remain stable during the entire forecast period and even speed up slightly in 2025. This deviation from the standard S-curve indicates a full proliferation of 5G in most of the world that will bring additional spending by creating new opportunities for industries that depend on connected applications, IoT devices in the field, and management tools that ensure business continuity, resiliency, and safety. According to a new section of the Telecom Services Tracker – the 5G add-on – 5G will constitute 38.8% of total mobile connections and 41.3% of total mobile spending by the end of the forecast period in 2025.

In the first half of 2021, the global telecommunications industry demonstrated it could quickly resume, and even surpass, the pre-covid growth rates. “The troubles related to Covid-19 are still not in the rear-view mirror as the worsening pandemic dynamics in some low-income countries and the global supply-chain disruptions threaten to harm the fragile recovery of the market,” says Kresimir Alic, research director, telecommunications at IDC. “But because of the resiliency the industry showed during 2020, we are convinced that the market will remain in a positive mood for at least the next couple of years.”