Steady Growth for Telecom/Datacom Test Equipment Buoyed By Wireless and VoIP QoS Segments
VDC's report "The Global Markets for Telecom and Datacom Test Equipment" analyzes and sections the test equipment industry into five primary segments: Datacom, Metallic Cable, Optical, Wireless, and VoIP QoS. This combined market is forecast to persevere through the current telecommunications slump and average 4% annual growth through 2006 to reach over $5.4 billion; much of the development will be due to significant increases in the demand for wireless and VoIP testing solutions.
VDC's comprehensive research indicates that in spite of the overall economic turmoil and reduced spending in the telecommunications sector, trends towards increased mobility and convergent networks should keep investments in wireless and IP networks strong, thus predicating the need for test equipment. Worldwide users of wireless phones and handsets are expected to reach in excess of one billion within the next two to three years. Technological advancements have made wireless communications more simple, affordable and ubiquitous than ever before. As the number of users and volume of information dependant on the integrity of wireless transmissions continues to increase, so too will the need to monitor and troubleshoot wireless networks. This is the principal reason that VDC projects the market for wireless test equipment to grow an average of 7.8% per year over the next 5 years, nearly double the rate of the overall market.
Moreover, as improvements to the IP family of protocols are made and large carriers begin to further implement voice over packet capability, maintaining high quality will become a top priority for those provisioning voice as a service over data lines. IP still accounts for less than 10% of all voice traffic worldwide, even though new networks offer the prospect of significant cost reductions and potential for unified, multimedia communications. Thus, first and foremost, IP will need to rival the reliability of the current PSTN in order to be deployed pervasively. Steady progress has been made on IP network quality, and VDC believes the role of products designed to measure and help maintain this quality will increase dramatically over the next several years. The market for VoIP QoS equipment is forecast to grow 13.4% annually through 2006, in effect almost doubling in that time span. The heady growth rates predicted for wireless and VoIP related test equipment should cause a gradual shift in the segment proportions of the total market for test equipment, and are well above the expected performance of products testing alternate media over the same time period, as can be seen in the following exhibit.
Datacom equipment should recover from an insufferable 2000-2001 to show modest growth in the next five years, due primarily to an increasing need for protocol analysis tools as interoperability between networks becomes a more pertinent issue. The sheer magnitude of metallic cable in existence will necessitate continued demand for cable test equipment in the future, however, VDC expects that as other media become more proficient and widespread, this demand will level off and eventually begin a steady decline as metallic cable is gradually phased out. Optical testing components should actually experience a slight overall reduction in market size, as current economic conditions coupled with a substantial excess of fiber already in-ground should curtail much of the need for new testing products. VDC does anticipate growth to return to the optical test sector towards the middle of the upcoming decade as spending recovers and advances in 40 Gb/s networks and DWDM technologies are made.
Study Source
Venture Development Corporation, a technology market research and strategy firm, was founded in 1971. Over the years, VDC has developed and fine-tuned a unique and highly successful methodology for forecasting and analyzing highly dynamic technology markets. VDC has extensive experience in providing multi-client and proprietary analysis in the telecommunications market. VDC also offers in-depth market research and custom strategic planning consulting services in the areas of industrial measurement and control, factory automation, communications, electronic components, as well as retail automation, office equipment, and consumer electronics.
About The Study
"The Global Markets for Telecom and Datacom Test Equipment" report is VDC's first entry into the telecom test equipment industry. It is designed to provide subscribers with relevant, up-to-date market intelligence to support product planning, market development, and channel partnering decisions. The study segments the test equipment market into five product-specific modules: Datacom, Metallic Cable, Optical, Wireless, and VoIP QoS. Each module market is analyzed and quantified by product type, region, consuming segment and application, and five-year forecasts are provided for the years 2001-2006. Market share ranges are also supplied by product and by region. This report provides a comprehensive, holistic view of the pertinent issues and trends in the telecommunications test industry today.
For further information about the "The Global Markets for Telecom and Datacom Test Equipment" report, contact Marc Regberg, Senior Vice President, or John Hutchison, Project Manager. The entire study (base report plus all five product modules) can be purchased for $5,950. The base report plus any one specific product module can also be purchased separately, for $3,950.