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TIA Releases 2013 MR&F: For First Time, U.S. Consumers Spent More on Mobile Data than on Voice; Mobile Penetration Topped 100%

CONTACT:  Ashley Rook, +1.202.429.4929, AshleyRook@Rational360.com

TIA Releases 2013 MR&F: For First Time, U.S. Consumers Spent More on Mobile Data than on Voice; Mobile Penetration Topped 100%

Annual Industry Report Also Finds U.S. ICT Growth will Surpass Global Growth in 2014 – As Demand for Efficiency & Cost Savings Drives Spending in Cloud, M2M and Cybersecurity

ARLINGTON, VA (March 4, 2013) – The Telecommunications Industry Association (TIA), the leading association representing the high tech manufacturers and suppliers of information and communications technology (ICT), today released its 2013 ICT Market Review & Forecast (MR&F).  Among the key findings in the report is that in 2012, for the first time, U.S. wireless data spending topped wireless voice spending, and U.S. wireless penetration surpassed 100 percent of the adult population.

The MR&F provides the industry's most comprehensive data review and analysis, with forecasts through 2016, of domestic and international spending and usage of wireless and wireline communications, specialized services (cloud computing, machine-to-machine (M2M) communications, cybersecurity, etc.), enterprise networks and more. 

The findings will be discussed in a TIA NOW live webcast today at 3 p.m. EST, featuring analysis by Arthur Gruen, author of the MR&F, as well as Beecham Research analyst Ken Figueredo and Current Analysis analyst Glen Hunt. Viewers can submit questions online during the program.

“The 2013 MR&F reveals, in dramatic fashion, that the ICT industry is squarely in the middle of an historic transition,” said TIA president Grant Seiffert.  “Wireless had a breakthrough year in 2012, with Americans spending more on mobile data than on voice services and with wireless subscriptions now outpacing the number of U.S. adults.  While wireless penetration will level off in the years ahead, infrastructure investments will continue surging in order to meet the heavy demand for mobile data. 

“At the same time,” Seiffert continued, “specialized services will put even more steam into the ICT market. Driven by the demand for greater efficiency and cost savings, U.S. business will spend heavily over the next four years on cloud services, M2M and cybersecurity.  This expansion will lead to another unprecedented shift – in which telecom spending grows faster in the U.S. than in international markets.”

The 2013 MR&F reveals that the global ICT industry continues to be challenged by the quickly accelerating demand for mobile data – driven by smartphones and tablets. As a result of this demand, mobile infrastructure spending will accelerate in the next four years – jumping 34 percent over the previous four years.

The 2013 MR&F data also predicts that in 2014, overall telecommunications spending growth will increase faster in the U.S. than internationally, reversing a trend that dates back to at least 2007.  The U.S. growth is being driven by accelerating demand for specialized services, most notably cloud computing, M2M and cybersecurity – all areas that hold the potential for significant cost savings and efficiency improvements.  Of these services, M2M saw the fastest growth in 2012 (57.1 percent) and over the next four years is expected to grow 57.2 percent annually.

The MR&F is compiled annually by TIA and used as a key resource for industry executives, policymakers, analysts and the media.  The report provides a global industry overview along with chapters that offer a deep-dive into specific industry segments.  This year’s MR&F also features a new “Major Trends” chapter, providing in-depth analysis of significant developments, including advancements in M2M communications, cybersecurity and sustainability.  More detail on some of the key MR&F data follows.

Mobile: A Breakthrough Year

In 2012, for the first time in the history of U.S. mobile telecommunications, more money was spent on mobile data services ($94.8 billion) than on mobile voice services ($92.4 billion).  TIA predicts that this trend will not only continue, but will accelerate in the years ahead – with mobile data spend hitting $118.6 billion in 2013 (versus $86.4 billion for voice) and $184 billion by 2016 (versus $70.1 billion for voice).

Adding to these significant mobile developments is the fact that U.S. wireless penetration jumped over 100 percent in 2012 – rising to 102.5 percent for the year.  The recent dramatic increases in wireless subscribers will lead to slowing future growth, and TIA predicts that carriers will add 40.3 million subscribers over the next four years, for a penetration of 111.3 percent in 2016.

To accommodate data traffic growth, wireless carriers are upgrading their networks and switching to LTE, which is sending wireless infrastructure spending higher.  While U.S. wireline infrastructure spending will continue to outpace wireless, wireless will close the gap in the years ahead.  In 2012, U.S. wireline spending was $39.1 billion, compared with $27 billion for wireless infrastructure.  By 2016, wireline spending is expected to climb to $44.4 billion, while wireless will reach $38.4 billion.

Meanwhile, overall spending on both wireless and wireline infrastructure will total $313 billion over the next four years (2013-2016) according to TIA estimates – an increase of 34 percent over the $233 billion that was spent during the previous four years (2009-2012).

Overall Industry Growth: U.S. will Soon Outpace International

The overall telecommunications industry experienced 7 percent worldwide growth in 2012, down 3 percent from 2011.  While growth actually accelerated in the U.S. (from 5.9 percent in 2011 to 6.2 percent in 2012), international markets saw a declining growth (11.3 percent versus 7.2 percent).

TIA sees this trend continuing, with the overall industry growth rate in the U.S. surpassing growth in international markets in 2014.  The MR&F predicts U.S. growth rates of 7.1 percent in 2013 and 6.8 percent in 2014, while international markets will see rates of 7.9 and 6.5 percent, respectively.  Driving the U.S. growth will be specialized services (cloud computing, M2M, etc.) – which comprised 8 percent of the U.S. market in 2012 and will generate 27 percent of the projected spending growth in 2013.

Cloud, M2M and Cybersecurity Becoming Huge Drivers

There is a common theme behind the strong growth in these three areas – the desire for more efficient and cost-effective implementation of ICT technologies.  For many companies, cloud computing significantly reduces costs associated with data storage, while M2M can cut energy costs and help companies move to lower-cost digital distribution instead of physical manufacturing.  Meanwhile, effective cybersecurity provides valuable insurance against the costs – and business risks – of data breaches.

The MR&F predicts all three areas will see double-digit percentage growth rates over the next four years.  M2M will lead the way, with a combined average growth rate of 57.2 percent over the next four years.  The category achieved 57.1 percent growth in 2012, and is expected to pull back somewhat in 2013 (44.6 percent) before charging ahead with 59 percent growth in 2014 and 72.2 percent growth in 2015.  Cloud services will see a combined average growth rate over the next four years of 16.3 percent, after achieving 20.5 percent in 2012, while cybersecurity spending growth rates are expected to remain steady – going from the 19.1 percent rate achieved in 2012, to 18.8 percent in 2013 and 18.6 percent in 2016 – for a combined average growth rate of 19.2 percent.

About TIA

The Telecommunications Industry Association (TIA) represents manufacturers and suppliers of global communications networks through standards development, policy and advocacy, business opportunities, market intelligence, and events and networking. TIA enhances the business environment for broadband, mobile wireless, information technology, networks, cable, satellite and unified communications. Members' products and services empower communications in every industry and market, including healthcare, education, security, public safety, transportation, government, the military, the environment, and entertainment. Visit tiaonline.org for more details.

TIA is accredited by the American National Standards Institute (ANSI), and is a proud sponsor of ANSI’s Standards Boost Business campaign. Visit www.standardsboostbusiness.org for details.

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About TIA

The Telecommunications Industry Association (TIA) represents manufacturers and suppliers of global communications networks through standards development, policy and advocacy, business opportunities, market intelligence, and events and networking. TIA enhances the business environment for broadband, mobile wireless, information technology, networks, cable, satellite and unified communications. Members' products and services empower communications in every industry and market, including healthcare, education, security, public safety, transportation, government, the military, the environment, and entertainment. Visit tiaonline.org for more details.

TIA is accredited by the American National Standards Institute (ANSI), and is a proud sponsor of ANSI’s Standards Boost Business campaign. Visit www.standardsboostbusiness.org  for details.

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