As much as it’s difficult to trust market forecasts, businesses around the globe depend on analysts to make educated guesses about the economic future. One industry in particular, however, has experienced a dearth of analysts lately, and that is the telecommunications industry. The analysts sunk out of sight along with the popped telecom balloon. But the time has come for a repopulating of the field.
After many years of toil and trouble post telecom bubble, industry fortunes turned a corner back to positive growth in 2004 and 2005. Finally, a few analysts emerged from hibernation, peeking at telecom and fiberoptics again like turtles from their shells. A report by Insight Research (Boston) released in January predicts that global revenue of service carriers will reach $1.24 trillion in 2006, adding roughly $67 billion to the 2005 sales figures and continuing to grow at a compound annual growth rate (CAGR) of 5.9% through 2010 (3.9% annually for North America). Wireless revenue will take off, comprising 49% of all telecom services revenue by the end of 2006, the Insight Research report predicts, and will grow to 56% of all telecommunications industry revenue by 2010. Although wireless growth sounds like a death-knell to connectors, the number of power supplies, chargers, cables, and attachments that go with laptops and cell phones will mean even more connectors than ever before.
Fiberopics analyst firm, KMI (Nashua, NH), predicts a “watershed event” in 2007-that fiberoptic cabling will exceed unshielded twisted pair (UTP) cabling for the first time. In 2003, FTM Consulting (Hummelstown, PA) gave a similar forecast, predicting that fiber cable shipments will exceed copper cable shipments by 20% in 2007. Whether or not fiber overtakes copper, both of them are here to stay. Analysts expect positive growth for copper and fiber cabling-and the connectors at both ends.
Hot spots in telecom technologies and products include fiber to the home (FTTH) and Ethernet (particularly Ethernet over IP), which is driving sales of new network equipment as a means to simplify network architecture. Along with the growth of Ethernet over IP, multi-protocol label switching (MPLS) is also growing in the metro and core as another protocol that provides management function for Ethernet and IP traffic. From a connector perspective, the growth of these various protocols also drives more “electronics” into our world, and hence more need for connectors.
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Valerie Coffey
Editor-in-Chief
valeriec@pennwell.com
