TIA revenue and spending data shows wireline telecom in recovery

The U.S. telecommunications industry is beginning to see an economic recovery, according to new research on landline revenues and spending released today by the Telecommunications Industry Association.

Although numerous revenue and spending metrics—including fiber miles deployed, access equipment spending and others--decreased between 2008 and 2009, many of the same metrics are expected to increase significantly by 2013, with many showing gains beginning in 2010.

On the revenue side, carriers are expected to earn $4.1 billion on IPTV in 2010, up from $2.9 billion in 2009, with further growth to $10.2 billion forecast for 2013. Perhaps surprisingly, voice revenues also are expected to increase, rising from $301.3 billion in 2009 to $301.5 billion in 2010 and $329.4 billion in 2013. That growth will be primarily fueled by growth in VOIP, which will account for 35.7 million lines in 2010, climbing to 46.1 million by 2013, while circuit-switch lines will decline from 137.3 million to 130.6 million over the same period.

The industry should expect a “more modest” decline in traditional voice lines over the next three years compared to what it has seen recently, report author Arthur Gruen, an economist with Wilkovsky Gruen Associates, told participants on a TIA webcast this morning. He attributes the decrease in the pace of decline largely to service bundling. “By 2013, virtually all voice subscribers will be buying it in combination with another service,” he predicted.

Broadband growth also looks strong, according to the TIA research, which predicts that the broadband adoption rate in the U.S. will increase to 90.7% by 2013, up from 64.2% in 2009.

On the spending side, one of the biggest increases came in the area of backbone infrastructure, on which spending is expected to increase from $9.4 billion in 2009 to $11.1bilion in 2010 and $15.3 billion by 2012. “As recently as 2003, the view was that we would have excess capacity for the [forseeable] future,” Gruen said. But because of huge use of data services, he said, “five or six years later, we’re running into capacity problems.”

In the access arena, Verizon and AT&T spent heavily on fiber to the home during 2008 but have since slowed the pace of deployment, which will depress spending on that technology for 2009 and 2010, Gruen said. But cable company spending on high-speed DOCSIS 3.0 cable modem equipment is just beginning to ramp up and will drive an increase in non-FTTH access equipment from $4.2 billion in 2009 to $3.7 billion in 2010, climbing to $5.7 billion by 2013.