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U.S. Telecom Growth Behind Global Leaders

In 2006, the U.S. telecommunications market grew at its fastest rate since 2000, according to the Telecommunications Industry Association (TIA). Regardless, the progress hasn't changed the fact that the U.S. is still behind the leading growth markets.

Each year, TIA's Telecommunications Market Review and Forecast analyzes the trends affecting the information and communications technology industry. The report includes an overview of the entire industry, as well as detailed sections on the landline, wireless, equipment and international markets.

The U.S. market grew 9.3 percent in 2006 to total $923 billion in revenue, and the worldwide telecommunications market grew 11.2 percent to total $3 trillion. Demand for broadband and high-speed services is fueling this growth, as carriers invest in new fiber, new IP technology and new wireless infrastructure to provide voice, video and data services.

The report forecasts growth for competing new broadband technologies such as fiber, satellite, wireless and broadband over powerline, which combined will account for more than 11 percent of broadband subscribers in 2010.

However, in 2006, cable modems and digital subscriber line (DSL) technology continued to dominate the U.S. market, capturing 96 percent of the broadband market, which in 2005 overtook dial-up Internet access service. By 2010, 87 percent of Internet connections will be over broadband technology.

Broadband video is one driving force behind deployment of the fiber needed to carry the high-capacity signal for this new technology, which allows telephone carriers to provide a pay-TV service comparable to cable TV. More than 12 million miles of fiber were deployed in 2006, up 9.1 percent from 2005, with nearly 10 million miles being deployed by the telephone companies.

While growth in voice traffic continues to stimulate the wireless market, data and multimedia applications will drive wireless revenues in the future. Though accounting for just 10 percent of U.S. wireless revenue in 2006, wireless data and multimedia services are forecast to make up 24 percent of all wireless revenue by 2010.

Growth is expected in VoIP, as the broadband-based phone technology is forecast to make up 34 percent of all U.S. residential landlines by 2010, or 25.5 million subscribers, up from just 10 percent and 9.5 million subscribers in 2006. A majority of cable telephone subscriptions use VoIP.

Worldwide, Europe has the largest telecommunications market, measuring at $1 trillion, with the U.S. second at $923 billion and Asia-Pacific third at $715 billion. Overall, the international market grew 12.1 percent in 2006. Middle East/Africa was the fastest growing region, expanding at 21.6 percent. By 2010, the global market is expected to reach $4.3 trillion in revenue.

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