IDC Sees Telecom Spending Declining By 1% in 2020

INTERNATIONAL Data Corporation (IDC), global provider of market intelligence and advisory services for information technology has projected that telecom spending is expected to decline by 0.8 percent in 2020 worldwide when compared to 0.5 per cent growth last year. According to the company's March 2020 finding, "Carriers will continue to invest in 5G network deployments in many countries, while the lock down has increased demand for fixed broadband services in the short term.

"The economic slowdown is expected to put 'macro pressure' on consumer spending, including upgrades to 5G mobile contracts, in the second half of 2020, yet the overall impact on telecom spending will be moderate compared to other ICT markets.

"The IT infrastructure spending is projected to grow by an estimated 4% to $437 billion in the wake of spending by service providers for resiliency, in addition to increasing enterprise demand for cloud services. Whereas, the ICT spending, which includes telecom and business services, will decline by 3.4% this year to just over $4 trillion with telecom spending down 0.8%," the company explained.

Stephen Minton, programme vice president in IDC's Customer Insights and Analysis group, said: "Inevitably a major economic recession, in Q2 especially, will translate into some big short-term reductions in IT spending by those companies and industries that are directly impacted.

"Where there is growth, most of it is in the cloud," he added.

The report said cloud spending will continue to post moderate growth as businesses continue to fund existing cloud deployments and some businesses may utilize the remainder of the year to accelerate cloud projects as a means to control costs and defer data center and application upgrades. Minton also explained: "Overall software spending is now expected to decline as businesses delay new projects and application roll-outs, while there is a fundamental link between employment and spending on things like software licenses and campus networks."

He added that the report found that early adopters of cloud and other digital technologies were best prepared to cope with the challenges and added that these adopters faced the least amount of disruption from an operational perspective.