Inflation drives global telecom services market growth – report

Written by IDC

Inflation drives global telecom services market growth – report
  • Global spending on telecom and pay-TV services is set to grow 3% to $1.55tn in 2023, according to an IDC forecast
  • Expected growth is driven mainly by widespread inflation
  • Each country has a specific “tolerance to price increases” that operators should evaluate, industry analyst urges

The global market for telecom and pay-TV services is on course to grow by 3% this year to $1.55tn, according to market intelligence giant IDC, though that growth is mainly driven by inflation (higher tariffs) than surging demand from end users for communications services.

According to IDC’s forecast, which it has just updated for the third time in the past 12 months as macroeconomic forces continue to affect the pricing strategies and revenues of telecom and pay-TV service providers, the Americas is not only the largest global region in terms of telecom and pay-TV service but also the one that is set to grow by the highest rate, at 3.3% year on year, as the table below shows.

The growth trends that have an impact on the more granular geographic regions varies, with IDC updating its forecast especially for the Middle East and Africa (MEA) and Latin America. The main reason for this is the ongoing impact of hyperinflation in a number of countries, including Turkey, Uganda, Egypt and Argentina, where “it has become normal” to see the quarterly average revenue per user (ARPU) increase by more than 50% compared with a year earlier.

On the other side of the spectrum was western Europe, where IDC’s expectations have been slightly lowered due to “a worsened economic environment in a few key countries”, such as Germany.

The research house also envisioned that current growth rates will be put under pressure and will slowly decrease towards the end of 2023.

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