HomeAccessSlight decline in telecom spending expected in 2020 but sector “resilient”

    Slight decline in telecom spending expected in 2020 but sector “resilient”


    Global spending on telecoms and pay-TV services is expected to reach almost $1.6 trillion (€1.48 trillion) in 2020, down 0.8% from 2019.

    This is according to IDC’s Worldwide Semi-annual Telecom Services Tracker.  The market research firm expects the decline to continue in 2021, but at a somewhat lower degree.

    Overall, the telecom services industry is proving to be one of the most resilient sectors of the global economy during the COVID-19 crisis, IDC said, describing the pandemic’s impact on telecoms spending as “limited”.

    “The measures imposed by many governments to ensure people stay at home and reduce face-to-face interactions have increased the consumption of telecom services,” an IDC statement said.  “However, the economic impact from shutting down businesses, higher unemployment, frozen tourist activities and reduced consumer spending on non-essential products and services will have a negative impact on the market.”

    Ups and downs

    The mobile segment, the largest division of the market, is expected to post a slight decline in 2020 due to lower revenues from roaming charges, less mobile data overages because of the stay-at-home measures and slower net additions, especially in the consumer area.

    Fixed data services spending is forecast to increase by 2.9% in 2020, driven by the need for more fixed Internet connectivity from home users. Spending on fixed voice services is predicted to continue to decline and could take an additional hit due to the pandemic as users are deemed likely to drop these services if they need to make savings.

    Fixed IP voice should survive longer as the service is included in bundles in most cases. Pay-TV services are being boosted by the lockdown, but also affected by the economic downturn, so the spending in this category is expected to decline slightly.

    In 2020, telecom services spending will drop in all geographic regions, according to IDC’s analysis. The largest market, the Americas, is expected to see a decline of just 0.04%.

    Bigger dips

    Meanwhile, Europe, the Middle East and Africa (EMEA) and Asia-Pacific (including Japan) are set to dip more – primarily because of the larger price-sensitive audience in the low-income countries of Africa and Asia, IDC said.

    Growth is not expected in EMEA or Asia-Pacific before 2022 as the users in emerging markets are expected to remain cautious about spending for some time.