U.S. Business Wireline Data Spending Fell in 2009: Report

Across nearly every category of wireline data services, spending by U.S. businesses is falling in 2009, a new report by In-Stat (News - Alert) found.

 

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

 

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

 

In-Stat predicted that spending will stabilize in 2010 and then start growing again in 2011. The category does not include managed services, such as, hosted IP telephony, LAN infrastructure, security, and other managed solutions.

 

“Ethernet Services and IP VPN services are among the lone bright spots in the market,” said David Lemelin, In-Stat analyst, in a statement. “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, Lemelin said.

 

Spending on wireline data services by U.S. enterprises of 1,000 or more 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 U.S. small businesses with five employees to 99 employees is projected to grow from about $100 million in 2008 to over $250 million in 2012.

 

Among vertical segments of U.S. 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, In-Stat said.