NEW YORK, Nov 30 -- According to research done by Infonetics Research, an international market research and consulting firm covering the networking and telecommunications industries, US telecommunications service providers will spend roughly $42.5 billion on networking equipment in 2004. This is a 220 percent increase compared with $13.3 billion spent by telecom providers in 2000.
Because of the growing number of nationwide fiber optic networks, or Tier 1 service providers, the largest increase in networking equipment spending will take place between 2000 and 2002. Beyond 2002 industry consolidation may cause expenditures to grow more slowly, the report said. Major US carriers will spend about $20.5 billion in 2001, an increase of 54 percent compared with spending in 2000, and will spend about $28.7 billion in 2002. Growth will fall to 21.9 percent, or $35 billion, in 2003, the report said.
For the purposes of the study, spending was defined as expenditures on products such as optical networking equipment, digital subscriber line Internet access equipment and modems, routers, firewalls and local area network switches. The study did not include spending on servers.