TelecommunicationsIndustry Association (TIA)

Webinar

Broadband Stimulus KickstartsICT Industry Growth

Analysis Based on TIA’s 2010 ICT Market Review & Forecast

Presented by Economist Arthur Gruen and TIA Vice President for Government Affairs Danielle Coffey

March 19, 2010

3-5 Year Forecast and Global in Scope

• Report produced by TIA annually since 1986• Economists Wilkofsky-Gruen Associates• Online version through TelecomTV• Segments information by:

– Geography (U.S., international, global)– Sectors & services:

• Landline• Wireless• Enterprise• Network equipment• Broadband• VoIP• Data transport• Internet access

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Global Market Forecast

• Mobile data-services demand skyrocketing• Average Revenue Per User (ARPU) principal driver

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Broadband Drivers

• Post-recession recovery 2010-13 dominant driver for next four years

• Growing demand for high-volume data applications driving all segments

• Demand pushes rollout of 4G networks• Government broadband stimulus awards to fuel network

infrastructure growth to meet demands• Rural broadband to benefit from stimulus• Adoption of National Broadband Plan on the horizon

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Broadband Growth

In the residential market, household penetration of broadband will increase from 64.2% in 2009 to 90.7% in 2013.

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Broadband Subscription Growth

Fixed wireless is emerging as a last-mile solution for rural areas. In percentage terms, fixed wireless will be surpassed only by FTTH as the fastest-growing broadbandtechnology during the next four years.

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Infrastructure Spending

Cumulative spending on infrastructure equipment will total $130.8B through 2010-13.

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Fiber Deployment

A total of 52.5 million miles is expected to be deployed during 2010–13, primarily in the backbone infrastructure.

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Access Equipment Spending

DOCSIS 3.0 modems installation will drive spending on cable access equipment by 20.4% over the next two years.9

Backbone Infrastructure Spending

Stimulus funding will extend backbone infrastructure so more homes will be in range of DSL, cable modem and fixed wireless broadband service.

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Overall U.S. Landline Spending

By 2011, we expect the economy to be on a recovery path, which will affect most components of the market positively.

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Voice Landlines

Voice landlines will total an estimated 176.7M in 2013, a 0.3% compound annual increase from 2009.

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Decline in Voice Spending

Overall landline voice spending will fall $160.1B in2013 from $168.1B in 2009.

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Bundling Up

By 2013, only 7 million households in the United States will have non-bundled telephone service.

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Cable Telephone Subscribers

By 2013, we project that VoIP will account for 93% of cable’s telephone subscribers.

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Residential VoIP Subscribers

The overall residential VoIP market will rise from 27.5 million subscribers in 2009 to 40.0 million in2013, growing at a 9.8% compound annual rate.

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VoIP Transition Continues

Projections show that by 2013 there will be more than 54% as many VoIP subscribers as circuit-switched subscribers.

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VoIP: Residential and Business

By 2013, business VoIP will account for 9.7% of all business lines, while residential VoIP will grow to a 35.1% share.

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U.S. IPTV Spending

IPTV spending will more than triple to $10billion by 2013.

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National Broadband Plan

• TIA provided a roadmap with 7 main issues to be addressed, including:– Broadband access and adoption– Spectrum allocation and efficiency– Access to all Americans, those in rural areas and with disabilities– Public Safety– Trade– R&D– Energy & Environment

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National Broadband Plan

• Focus: Investment and Innovation; Inclusion; National Purposes

• Recommendations: – Transition of Universal Service Fund to Broadband– Freeing 500 Mhz of Much-Needed Spectrum– Interoperable Public Safety Network– Digital Literacy Corps– Broadband Accessibility Working Group and Accessibility and

Innovation Forum

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FCC’s Broadband Principles

TIA APPROVES Every American should have a meaningful opportunity to benefit from the broadband communications era. TIA APPROVES Continuous private sector investment in wired and wireless networks and technologies, and competition among providers, are critical to ensure vitality and innovation in the broadband ecosystem.TIA APPROVES Strategic and prudent policies toward public resources like spectrum will benefit all Americans, by meeting current and future needs and by promoting continued innovation, investment, and competition.TIA APPROVES The nearly $9 billion Universal Service Fund (USF) and the intercarrier compensation (ICC) system should be comprehensively reformed.TIA APPROVES Our Nation should harness the tools of modern communications technology to protect all Americans, including by enabling the development of a nation-wide, wireless, interoperable broadband network for the Nation’s first responders.TIA APPROVES Ubiquitous and affordable broadband can unlock vast new opportunities for Americans, in communities large and small.

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More on Other Sectors Soon

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Research Methodology

1. Reference unbiased, respected third-party sources2. Identify underlying economic, technological, regulatory

and competitive factors3. Develop models to quantify impact of factors on industry

revenues4. Create forecast scenario for each causative factor and

assign relative significance weight5. Apply proprietary mathematical models and algorithms to

compute range of prospective results6. Tune the results based on professional expertise and

institutional knowledge

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How To Order

TIA’s 2010 ICT Market Review & Forecast Mobile and Wireless Communications Chapter Is Available Today

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http://www.tiaonline.org/market_intelligence/mrf/index.cfm

TIA: A World-Recognized Authority

Since 1924, TIA has represented the global information and communications technology (ICT) industry Works through Policy, Standards, Environment, Intelligence and Networking3,000 TIA standards developed, including:

New Committee: Smart Communications DevicesData centers and Cat 5/Cat 6 cablingCell towers and CDMA technologyCALEA and P25Ethernet

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TIA Board of Directors

Recognized leadershipAdvances association mission

ACS | ADC | ADTRAN | Alcatel-Lucent | ANDA Networks | AttivaCorp |Avaya | Bechtel Communications, Inc. | Cisco Systems | Corning

Incorporated | Ericsson, Inc. | GENBAND, Inc. | Graybar | Henkels & McCoy | ILS Technology | Intel Corp. | Intersect, Inc.| LGE | Microsoft |

Motorola | Nokia Siemens Networks | Nortel | Openwave, Inc. | Panasonic Computer Solutions Co. | Powerwave Technologies| Qualcomm | Research In Motion | Sumitomo Electric Lightwave

Corporation | Tellabs | Tyco Electronics | Ulticom, Inc. | Verari Systems Advisors to the Board: FAL Associates | Orca Systems | Telcordia

Technologies

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TIA’s Policy Agenda

Thank You!

Contact TIA atmsnyder@tiaonline.org

tiaonline.org

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