Wireline data services spending declines

SCOTTSDALE, USA: Across nearly every category of wireline data services, spending by US businesses is falling in 2009, reports market research firm In-Stat.

Overall, In-Stat expects a nearly two percent decline in the US business spending on wireline data services, which represents the first time this market has declined in the 10 plus years In-Stat has been tracking it.

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Wireline data services include expenditures on wide area network (WAN) data transport services, as well as, dedicated Internet access (which includes cable and DSL), network-based IP VPN, private line, frame relay, ATM, and Ethernet services. 

The category does not include managed services, such as, hosted IP telephony, LAN infrastructure, security, and other managed solutions, which are tracked separately by In-Stat.

David Lemelin, In-Stat analyst, says: “Ethernet services and IP VPN services are among the lone bright spots in the market. Spending on ATM, frame relay and private Line services is particularly weak, declining about nearly 10 percent from 2008. Among the vertical business markets, the professional services and healthcare segments are faring best, but even these are only flat year to year.”

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Research Highlights

Spending on wireline data services by US Enterprises (1000+ employees) is on track to decline from $23 billion in 2008 to $22.4 billion in 2009.

Spending will stabilize in 2010 before returning to growth reaching $25 billion by 2012.

Spending on IP VPN services by US Small Businesses (5-99 employees) is projected to grow from about $100 million in 2008 to over $250 million in 2012.

Among vertical segments of US Enterprises, government represents the largest segment.

Spending on Ethernet services among healthcare firms will see some of the strongest growth, nearly tripling from 2008 to 2012.