Will North American Telecom Service Revenue Double by 2016?

Global carrier revenue is expected to achieve a nine percent compound annual growth rate from 2011 to 2016, growing to a total of $5.13 trillion, according to Insight Technology Corp.

Perhaps more surprising, Insight Technology Corp. predicts that, within that time period, North American carrier revenue growth is expected to rise from $286.8 billion to $662.1 billion, representing an even-stronger 11 percent CAGR.

Optimistic forecast

That might strike you as an optimistic forecast, in fact, given that the largest firms, representing most of the industry revenue, do not report revenue growth that high.

In fact, if the Insight Technology forecast is correct, revenue could double between now and 2016. Some will doubt the accuracy of the forecast, even though many would be pleasantly and shockingly surprised. If the forecast proves accurate, it as well would defy the general rule that revenue growth for products of most types now is stronger outside the United States than in it.

The forecast as well explicitly assumes that North American service providers successfully will grow new earnings at a rate fast enough to compensate for weakening voice earnings, for instance.

Previously 2008 forecast

Compared to an previously 2008 forecast by Insight Innovation, the global forecast has lowered North American growth rates and dramatically raised growth projections for Latin America. In terms of segment revenue, the latest forecast projects a 45 percent CAGR for global wireless broadband revenue, 14 percent for fixed-line broadband, about six percent growth for narrowband wireless services and negative three percent revenue change for fixed network narrowband services.

One way to look at the structure of the global market is to note that, by 2016, wireless broadband will account for about 28 percent of all communications service revenue. Narrowband wireless services will account for 38 percent of global revenue.

Altogether, wireless will represent 66 percent of total industry revenue. Fixed-line broadband will account for 11 percent of global revenue, during fixed-line narrowband services will represent 23 percent of total revenue.