Telcos in Asia/Pacific Are Performing Better than Expected: IDC Has Adjusted Its Forecast for Worldwide Connectivity Services Market Upwards

FRAMINGHAM, Mass.– Worldwide spending on telecommunication and pay TV services will reach $1,565 billion in 2020, representing a decline of 1.1% year on year, according to the International Data Corporation (IDC) Worldwide Semiannual Telecom Services Tracker. Although this market will return to growth next year, it is not expected to achieve the pre-COVID-19 spending levels before 2022.

The latest forecast for telecom services spending is a bit more optimistic than the one published in September. The major reason for this is the better-than-expected results reported by telecom operators in the Asia/Pacific region, especially in China. This is the logical consequence of the Chinese economy’s fast recovery, which brought a new wave of optimism and boosted demand for telecommunication services. India, the third largest market in the Asia/Pacific region, also witnessed unexpectedly positive movement. Although the forecast for that market remains negative, it has improved by several percentage points and thus enhanced the results for the entire region.

IDC has not made significant changes to its forecast for the Americas and EMEA markets. The scenario revealed in September that presumed a slight decline in spending on telecom services due to the economic downturn caused by the pandemic seems to be coming true. The introduction of new lockdowns in the biggest European countries, in our view, should not have an immediate impact on the telco market, because telco services have been secured by longer-term contracts. Moreover, a bigger decline in demand is not very probable because many European governments have imposed additional measures aimed at protecting businesses and the general population from the economic impact of the pandemic.

* Note: Forecast values.

 

The 1H20 update of the Worldwide Semiannual Telecom Services Tracker has verified that the telecommunications industry remains one of the most resilient sectors of the global economy during the COVID-19 crisis. “The telecom services segment is weathering the COVID-19 storm better than other ICT segments,” said Carrie MacGillivray, group vice president and general manager, Worldwide Telecom, Mobility, and IoT research at IDC. “Connectivity has been the linchpin in keeping individuals connected and businesses operational during this unprecedented time. COVID-19 will be a case study we will reference for years to come as the start of the Future of Connectedness.”