Telecom spending to grow 5% in 2010: Gartner

Spending on IT and telecom is set to rebound from last year’s slump, with research firm Gartner predicting growth of more than 5% in 2010.

The telecom market, which shrank 3.4% in 2009, will grow 5.1% to $1.99 trillion this year, while the IT services sector will grow 5.7% to $821 billion, Gartner said.

However, the research firm said that that nearly four percentage points of the growth would be as a result of an expected decline in the value of the dollar this year. Taking into account currency fluctuations, total ICT spending would grow 1.6%, compared with a 1.4% decline in 2009, Gartner said.

Total ICT spending is forecast to reach $3.4 trillion, up 5.3% from $3.2 trillion last year.

“Following strong fourth quarter sales, an unseasonably robust hardware supply chain in the first quarter of 2010, combined with continued improvement in the global economy, sets up 2010 for solid IT spending growth,” said research vice president Richard Gordon.

The telecom sector would be marked by a shift in spending away from services and towards mobile devices. Handset spending is expected to increase its share of the market from 11% to 14% over the next three years, while the service share will drop from 80% to 77%. Network spending would be steady at 9% of the total market, Gartner said.

Enterprise network services spending is forecast to grow 2%, but virtually all of this will be in Asia and other emerging markets, with a decline forecast in Europe and flat sales in North America.

“Longer term, the global enterprise network services market is expected to grow modestly, largely on the back of growth in Internet services, such as hosting,” said Peter Kjeldsen, a Gartner research director.

“Ethernet services will also grow significantly, albeit at the expense of both legacy services and multiprotocol label switching (MPLS).”

[TABLE] Worldwide ICT spending forecast

Source: Gartner (April 2010) Unit: $ billions

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