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Report Sees Mixed Results for Communications in 2015

January 14, 2015

A rise in data communications spending will help soften a perceived weakness in telecommunications this year, according to an upcoming report from Infonetics Research (News - Alert).

But the report, "Global Telecom and Datacom Market Trends and Drivers", also sees good things overall for the market in the year ahead. "After a weak 2013, enterprise networking and communication revenue growth accelerated in 2014 thanks to a resurging North American market and stepped-up investments in security infrastructure," co-author of the report Matthias Machowinski, Infonetics' directing analyst for enterprise networks, told online technology site Lightwave. "We expect similar results in 2015, when strong end-user demand in North America and Asia-Pac is likely to be offset by a slowdown in Europe."

Besides increased investments in security, other trends in the enterprise networking and communication markets show a boost in the adoption of cloud services and the use of cloud architectures in enterprise data centers, the report says. But the news wasn't so good on the telecom side, due to weakness in mobile revenues and ongoing economic problems in Europe, Lightwave noted. “For example, global mobile service revenue for the first half of 2014 rose just 0.5 percent from the same period in 2013, with Europe proving a drag on growth,” according to Infonetics.

"Overall, growth in telecom revenue continues to slow in every geographic region,” said Stephane Teral (News - Alert), principal analyst for mobile infrastructure and carrier economics at Infonetics. “Europe's five largest service providers -- Deutsche Telekom, Orange, Telecom Italia, Telefonica, and Vodafone (News - Alert) -- continue to experience declining revenue, though less pronounced than in the past three years. And in North America, AT&T and Verizon have signaled that the mobile services price war started by T-Mobile (News - Alert) US is taking a bite.”

Still, mobile data services, which include text messaging and mobile broadband, rose in every region in the first half of 2014, thanks to the increasing use of smartphones. Along these lines, mobile broadband services grew 26 percent year-over-year, enough to offset the decline of SMS revenue, Infonetics said.

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