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To the tune of £4 trillion, TIA review says

The smart choice: opportunity from uncertainty

But even when all of this is taken into account, as well as the various population ages of the landline owners, the TIA report expects to see residential landlines falling at 6.1 per cent a year through 2010, at least in the US.

We have said many times in the past that in countries in Central Europe and the under-developed parts of Asia and the Pacific rim, it is hard to see an economic reason for the introduction of new fixed lines. They cannot be justified on voice revenues alone, especially not in countries which are at, or which are heading towards, 100 per cent mobile voice penetration. But in countries that have virtually no infrastructure in some rural areas, fixed lines and fiber for any kind of line, including cellular, still need to be built.

Because of these reasons we can see why internationally landline growth slowed to 3.9 per cent in the US, in Canada it actually fell by 4.2 per cent, was flat in Europe, but in the Middle East and Africa it rose 11 per cent and Asia Pacific and Latin America grew around 5 per cent.

Today, the review has international landlines at 1.14 billion and US lines at 150 million, roughly 1.3 billion between them. This figure will rise to only 1.4 billion by 2010, and all the time the growth and the service revenues will be slowing, and in the more advanced markets the numbers will actually be going backwards.

By contrast, cable and DSL broadband connections, by the end of 2007, are placed at around 278 million globally, with 215 million of these installed outside of the US, and inside the US 30.6 million DSL and 32.7 million cable.

This is seen as rising to 439 million globally by 2010, with 396 of these installed outside the US and DSL in the US reaching roughly 40 million to the cable industry's 43 million. As we said earlier some 11 per cent of that international figure is in new technologies and in the US a further 11 per cent has to be added for other technologies, making the total closer to 445 million. A lot of broadband lines, close on double what there are today, and whatever content consumers choose to send over these lines, it remains a hugely growing opportunity compared to almost any other telecommunications market except mobile.

One change that we can see very clearly on the cellular graphs is the way in which the US is topping out in cellular subscriber additions. Annual numbers grew by 14 per cent and 15 per cent in 2004 and 2005, but this is expected to fall back to just 2.7 per cent in 2010, virtually saturated at 270 million handsets.

By contrast, the rest of the world has many exceptionally high growth areas, with a few spattered regions, like Europe, where handset populations are already static. The net effect internationally was a growth in wireless handsets of 25 per cent and 23 per cent growth in 2004 and 2005, and this will flatten down to around 10 per cent by the end of this forecast, by which time it will account for a huge 3.1 billion devices (3.4 billion if you include the US), up from 2.4 billion today.

The data for the entertainment side of this is less detailed. IPTV is talked about anecdotally, and mobile TV, along with music and games on handsets is discussed, but not quantified, so it's difficult to see hard forecasts for IPTV numbers, mobile TV numbers and video over web to handsets. Here it appears to be taken the projections of various operators, which need to replace lost voice revenues with data and video applications, but for the most part decisions have not been taken about exactly what these operators will deploy, only how much money they will need from them.

Whichever way you need to slice and dice the telecommunications industry, there's some raw data here for you to start with, and we will come back to the review time and time throughout the year, to keep our base assumptions on track.

Copyright © 2007, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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