It's not hard to equate the world's weak economy with lackluster wireline business data sales. In-Stat's latest report US Business Spending by Size of Business and Vertical: Telecom-Wireline Data Services confirms that U.S. business wireline data spending will decline about 2 percent this year. In-Stat reports this is the first time the wireline business market has seen a decline since it started tracking it a decade ago.
Business spending on wireline data services by large U.S. enterprises with 1,000 or more employees will decline from $23 billion in 2008 to $22.4 billion in 2009. In 2010 wireline data spending remains flat before seeing $25 billion in growth in 2012. What's leading to the decline is the ongoing migration off of legacy data services such as private line, ATM and Frame Relay. Recent earnings statements from the largest service providers, including AT&T, Qwest, Sprint and Verizon confirm such facts.
However, it's not all doom and gloom in the business service segment as IP VPN and Ethernet services are on the rise. Led mainly by small businesses (5-99) employees, IP VPN spending will grow from about $100 million in 2008 to $250 million in 2012. Meanwhile, hospitals and related healthcare companies spending on Ethernet will triple from 2008 to 2012.
"Ethernet Services and IP VPN services are among the lone bright spots in the market," says David Lemelin, In-Stat analyst in a release. "Spending on ATM, Frame Relay and Private Line services is particularly weak, declining about nearly 10 percent from 2008. Among the vertical business markets, the professional services and healthcare segments are faring best, but even these are only flat year to year."
- see the In-Stat release here
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