The International Data Corp (IDC) forecasts a 3 per cent increase in global spending on telecoms and pay TV services in 2023, bringing the total to USD 1.55 trillion. This growth is expected to be driven by increased demand for cloud services and 5G connectivity.
The IDC’s latest forecast is a full percentage point higher than its May estimate, marking the third such rise over the past year. Hyperinflation was a key factor in this trend, with Turkey, Uganda, Egypt, and Argentina among the countries impacted, reporting year-over-year increases of 50% or more in average revenue per user (ARPU). The trend is expected to continue in the coming year, with inflation rates in these countries rising further.
The IDC notes that the impact of hyperinflation on market growth will vary across countries. Some markets have allowed regulators to increase tariffs, often using a CPI-based model to do so. This has led to strong revenue growth for operators on an annual basis in some markets, but it has also prompted migrations to cheaper plans or competitors in others. As a result, the value growth rate is lower than the nominal tariff increase in some markets.
In Western Europe, the IDC has slightly lowered forecasts due to deteriorating macroeconomic conditions in key countries like Germany. The organisation predicts that this will increase pressure on growth rates over time, gradually offsetting the impacts of hyperinflation in Europe, the Middle East and Africa (EMEA) and globally by the end of the forecast period.
According to IDC, telecom services revenue in EMEA is expected to reach $461 billion in 2023, up 3.1 per cent from $447 billion in 2022. In the Americas, revenue is forecast to rise to $594 billion from $575 billion in 2022, and in Asia-Pacific, revenue is expected to increase by 2.6 per cent to $499 billion. Overall, these numbers point to a steady rise in revenue for the telecom sector over the next year.
Mobile is predicted to remain the largest segment of the telecom market, supported by increasing mobile data usage and Machine-to-machine applications, but offset by decreasing spend on mobile voice and messaging. Fixed data services are also expected to grow, driven by increasing demand for higher bandwidth services. Fixed voice services will see declining revenues due to the shift to IP-based voice, while pay TV revenues will also decline as VoD and OTT services gain traction. Despite this, IDC expects multi-play packages to continue to be driven by Pay TV for the foreseeable future.