Telecom Sales to Enterprises to Grow Less than 1 Percent in 2013

By Gary Kim August 13, 2013

Enterprise and governmental users are key customer segments for telecommunications service providers, and despite a flat to modestly growing government information technology spending forecast, the news might not be so good for communications service providers.

Nearly 75 percent of government IT budgets globally were reported as flat or increasing in 2013, according to the Gartner researchers. And those trends seem to match expectations for telecom services spending.

Global information technology spending is projected to total $3.7 trillion in 2013, a 2-percent increase from 2012 spending of $3.6 trillion, according to the latest forecast by Gartner.

Notably, the forecast for spending on devices in 2013 has been revised down from 7.9 percent growth in Gartner's previous forecast to 2.8 percent.

The decline in PC sales, recorded in the first quarter of 2013, continued into the second quarter with little recovery expected during the second half of 2013.

                      Worldwide IT Spending Forecast (Billions of U.S. Dollars)

2012

Spending

2012

 Growth (%)

2013

 Spending

2013

 Growth (%)

2014

 Spending

2014

 Growth (%)

Devices

676

10.9

695

2.8

740

6.5

Data Center Systems

140

1.8

143

2.1

149

4.1

Enterprise Software

285

4.7

304

6.4

324

6.6

IT Services

906

2.0

926

2.2

968

4.6

Telecom Services

1,641

-0.7

1,655

0.9

1,694

2.3

Overall IT

3,648

2.5

3,723

2.0

3,875

4.1

Source: Gartner (July 2013)

Telecom services spending is forecast to grow 0.9 percent in 2013, while fixed broadband shows slightly higher than anticipated growth. 

The impact of voice substitution is mixed as it is moving faster in the consumer sector, but slightly slower in the enterprise market.

Gartner's “CEO and Senior Executive Survey 2013” indicates that private-sector business leaders also are poised to boost investments in e-commerce, mobile, cloud, social and other major technology categories.

Despite this, Gartner projects a modest compound annual growth rate of 1.3 percent for IT spending in the government and education sectors through to the end of 2017, with increased spending for IT services, software and data centers.

For the third consecutive year, reducing enterprise costs ranks among the top three business priorities for government CIOs in 2013, Gartner says.

Gartner’s latest annual survey of 1,959 CIOs worldwide from all industries was conducted in the fourth quarter of 2012 and represents CIO budget plans reported at that time. It included 398 public-sector CIOs from all tiers of government around the globe.




Edited by Alisen Downey

Contributing Editor

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