TelecommunicationsIndustry Association (TIA)

Webinar

ICT Is Key Driver for Global EconomyAnalysis Based on TIA’s 2010 ICT Market Review & Forecast

Presented by Economist Arthur Gruen and TIA Director for International and Government Affairs Nick Fetchko

April 28, 2010

3-5 Year Forecast and Global in Scope

• Report produced by TIA annually since 1986• Economists Wilkofsky-Gruen Associates• Online version through TelecomTV• Segments information by:

– Geography (U.S., international, global)– Sectors & services:

• Landline• Wireless• Enterprise• Network equipment• Broadband• VoIP• Data transport• Internet access

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Global ICT Market Forecast

Global telecommunications spending will grow at a 6.3% percent compound annual rate to $4.9T in 2013 from $3.9T in 2009.

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International Market Drivers

• Post-recession recovery 2010-13 dominant driver for next four years

• Wireless subscriptions will increase 1.4B to 5.5B during next four years, a cumulative 33% advance.

• Large gains in broadband and wireless penetration will fuel growth in Asia Pacific

• Surging broadband market and wireless growth will drive spending in Latin America

• Middle East/Africa will be fastest-growing international region

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Overall U.S. Spending

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For the forecast period as a whole, growth will average 3.7% compounded annually to $1.14T in 2013.

Overall Non-U.S. Spending

Overall non-U.S. spending will grow $915B to $3.8T in 2013, a 32% increase from 2009.

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Spending Growth by Component

In 2009, the equipment market fell much faster than the services market.

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Biggest Spenders

The top 12 countries as a group accounted for 47% of total international telecommunications spending in 2009.

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‘Top’ 12 in Broadband

Europe had the top seven countries in the world and 11 of the top 12 in broadband penetration.

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Internet Subscribers

Because of the broadband surge during the past four years, dial-up had 44% fewer subscribers in 2009, and by 2013 there will be 75% fewer subscribers.

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BRIC Market Spending

BRIC telecommunications spending will total $954B in 2013, comprising 25.1% of total international telecommunications spending, up from 22.8% in 2009 and 16.5% in 2003.

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U.S. Trade Deficit

The trade deficit, which declined slightly in 2001, has grown in each subsequent year.

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Overall European Spending

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For the forecast period as a whole, the overall telecommunications market will increase at a 4% compound annual rate to $1.31T in 2013.

The European Market

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During 2009-10, equipment will fall 5.8% on a compound annual basis, while services spending will continue to grow, although at a modest 1.6% compound annual rate.

European Broadband Access Revenue

Broadband access spending will increase from $59.7B in 2009 to a projected $87.5B in 2013, a 10% compound annual increase.

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IPTV Spending in Europe

We project IPTV spending in Europe to increase from $3.7B in 2009 to $8.9B in 2013, a 24.7% compound annual gain..

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Spending in Latin America

Overall growth for Latin America is projected to be 8.6% in 2010. Even faster growth of 10.7% is predicted for 2011 as the economy expands.

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Latin America Wireless Growth

We project wireless spending in Latin America to increase at a 9.3% compound annual rate to $134B in 2013 from $94B in 2009.

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Overall ICT Spending in Middle East/Africa

Overall telecommunications spending will rise to $395B in 2013, growing at a 12.1% compound annual rate, the fastest growth in terms of percentage of any region.

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Overall ICT Spending in Asia

For the 2010–13 period, the overall telecommunications market is set to expand at an 8.5% compound annual rate, rising to $1.5T from $1.1T in 2009.

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Wireless Subscriber Growth

A projected 340 million increase in India and a 300 million advance in China will bringing total subscribers in the two countries to 1.89 billion by 2013, 62% of all wireless subscribers in Asia Pacific.

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Wireless Spending in Asia

During the 2010–2013 forecast period, wireless spending growth in Asia Pacific will average 10.5% on a compound annual basis, with spending rising to $415.5B in 2013 from $279B in 2009.

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Broadband Penetration in Asia

We project the number of broadband subscribers to rise to 160 million in China by 2013, accounting for 64% of the total projected growth in broadband subscribers in Asia Pacific..

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Asia Broadband Spending

Broadband access spending totaled $31.4B in 2009, a figure we project will rise to $45.9B by 2013, a 9.9% compound annual increase..

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Equipment Spending in Asia

Spending on wireless devices overtook spending on public network equipment in 2008 and is now nearly as great asspending on enterprise equipment.

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International Policy Priorities

Trade

- Pending FTA’s with Korea, Colombia, Panama- Trans Pacific Partnership- National Export Initiative- Watching Key Cases

– U.S.-EU dispute over WTO Information Technology Agreement– U.S.-Brazil Cotton Dispute – Possible cross retaliation on U.S. IPR

- Annual contributions to annual 1377 Review Process and National Trade Estimate

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International Policy Focus: China

China-TIA support of USITO

Policy interests– Indigenous Innovation

• WAPI• TD-SCDMA• Indigenous Innovation Product Accreditation

– Type Approval– Telecom Law

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International Policy Focus: India

India- U.S.-India ICT Working Group

Policy Interests- Telecom Equipment Security Approval Regulations and Technology

Transfer Requirement- 3G and BWA Auctions- Licensing and regulatory issues (VoIP, license fee disparities,

Remote Access, etc.)

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Research Methodology

1. Reference unbiased, respected third-party sources2. Identify underlying economic, technological, regulatory

and competitive factors3. Develop models to quantify impact of factors on industry

revenues4. Create forecast scenario for each causative factor and

assign relative significance weight5. Apply proprietary mathematical models and algorithms to

compute range of prospective results6. Tune the results based on professional expertise and

institutional knowledge

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How To Order

TIA’s 2010 ICT Market Review & Forecast Mobile and Wireless Communications Chapter Is Available Today

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http://www.tiaonline.org/market_intelligence/mrf/index.cfm

TIA: A World-Recognized Authority

Since 1924, TIA has represented the global information and communications technology (ICT) industry Works through Policy, Standards, Environment, Intelligence and Networking3,000 TIA standards developed, including:

New Committee: Smart Communications DevicesData centers and Cat 5/Cat 6 cablingCell towers and CDMA technologyCALEA and P25Ethernet

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TIA Board of Directors

Recognized leadershipAdvances association mission

ADTRAN | Alcatel-Lucent | ANDA Networks | AttivaCorp | Cisco Systems | Ericsson, Inc. | GENBAND, Inc. | Graybar | Henkels & McCoy

| ILS Technology | Intel Corp. | Intersect, Inc.| LGE | Microsoft | Nokia Siemens Networks | Openwave, Inc. | Panasonic Computer Solutions

Co. | Powerwave Technologies| Qualcomm | Research In Motion |Sumitomo Electric Lightwave Corporation | Tellabs | Tyco Electronics |

Ulticom, Inc. | Wirefree

Advisors to the Board: FAL Associates | Orca Systems | Telcordia Technologies

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TIA’s Policy Agenda

Thank You!

Contact TIA atmsnyder@tiaonline.org

tiaonline.org

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