Telco and pay TV revenues to increase in US despite cord cutting trends

Despite ongoing subscriber losses, revenues from telco and pay TV services in the US are predicted to rise over the next five years. 

According to new research from GlobalData, revenues are predicted to increase at a compound annual growth rate (CAGR) of 0.7% between 2019 and 2024 to reach US$419.4 billion by 2024.

The short-term figures make for less positive reading, with the research firm estimating that revenues will hit US$404.5 billion by the end of 2019, representing a 0.5% decline over 2018.

Ivan Maldonado, technology analyst at GlobalData, said: “Despite this decline, which is mainly due to declining revenues from mobile and fixed-voice data communications, total service revenue is expected to increase.”

The main growth factor identified by the research is mobile data, which Maldonado noted will “will remain the leading contributor to telecom service revenue over the forecast period, increasing from US$131.2 billion in 2019 to US$194.6 billion in 2024.”

“Growth will be supported by the uptake of smartphone subscriptions, increasing demand for mobile data services, and growing adoption of 5G services.”

Elsewhere, fixed broadband revenue will also expand at a CAGR of 4% to reach US$78.5 billion by 2024. This is predicted to be driven by the increased adoption of ultrafast broadband service connections, supported by operator investments in fibre infrastructure.

Pay TV revenue however will drop in line with cord cutting. Revenues are predicted to drop from US$94.4 billion in 2019 to US$84 billion by 2024.

This report echoes the sentiments from a Leichtman Research Group study, which showed pay TV penetration in the country down to 75%, a significant drop down from 84% in 2014 and 87% in 2009.