Worldwide spending on Telecom Services and Pay TV Services hit $1,509 billion in 2023, marking a modest 2.1% increase from the previous year, reveals the International Data Corp. (IDC) Worldwide Semiannual Telecom Services Tracker. Projections indicate a further 1.4% rise in 2024, reaching a total of $1,530 billion.
The global market’s growth slowed in the latter half of 2023, registering approximately one percentage point lower than IDC’s earlier forecast. This slowdown is attributed to sluggish progress in the Americas, where economic sluggishness, high inflation, and market saturation hindered development.
In the Europe, Middle East, and Africa (EMEA) region, regulatory allowances for telecom operators to adjust tariffs according to inflation, utilizing a Consumer Price Index (CPI) model, spurred faster-than-expected growth. However, these adjustments also prompted a migration of customers toward cheaper packages, tempering actual value growth rates.
Looking ahead, the five-year outlook remains positive, although slightly less optimistic. Uncertainties stemming from delayed interest rate adjustments by central banks in the United States and Europe, alongside persistent inflation and geopolitical tensions, are expected to challenge market growth. In Asia/Pacific, slower growth is linked to China’s economic cooldown, although healthy growth is anticipated in India and other emerging markets.
Decline in the Pay TV market
Analysis by service type reveals ongoing trends, with the mobile segment maintaining dominance, driven by increased data usage and Machine-to-Machine (M2M) applications. Fixed data services continue to grow due to rising demand for high-bandwidth services, while spending on fixed voice services is projected to decline gradually.
Despite a minor decline in the Pay TV market due to the popularity of Video on Demand (VoD) and Over-The-Top (OTT) services, these offerings remain integral to telecom providers’ multiplay services.
“With the emergence of artificial intelligence (AI) and advanced analytics, the telecom operators have obtained a new powerful ally that should help them modernize their business operations and improve efficiencies,” said Kresimir Alic, research director, Worldwide Telecom Services at IDC.
The slow but steady development of the connectivity services market underscores the significance of innovation in maintaining competitiveness amid challenging economic and geopolitical landscapes.