LONDON The market for information technology and telecommunications (ICT) in the EU will increase in 2007 by 2.9 percent to Euros 668 billion, according to the latest report from the European Information Technology Observatory - EITO.
It estimates the total market will grow at the same rate next year to reach Euros 687 billion. The figures are compiled for the organization by market research groups IDC and GfK.
The EITO suggests broadband data services, IT services and software applications are the main drivers of growth, but that fixed voice services are dampening progress.
Presenting the report, EITO chairman Bruno Lamborghini warned that Europe needs urgently to address weaknesses in the ICT sector. "This can be achieved by exploiting the many strategic assets, such as the EU’s advanced communications infrastructures and services as well as the world’s largest market for education, comprising close to half a billion people. But at the same time Europe needs finally to put an end to its present weaknesses: market fragmentation, too little investment for R&D in ICT, limited high-tech start-ups, and insufficient preparation and mobility of people with the right kind of skills."
The report shows that Information technology (IT) is proving to be a reliable source of growth: the companies involved are turning Euros 320 billion this year, an increase of 4.4 percent. Above all, software and IT services are booming – with increases of 6.5 and 5.5 percent respectively. "We are expecting similarly high rates of growth next year", says Lamborghini.
The hardware market is also recovering, he adds: it is expected to grow by 1.7 percent in 2007 and in 2008 by 2.2 percent. Notebooks and multi-function peripherals are growing well, while the market for desktop PCs is shrinking.
For 2008, the EITO expects an overall market value in IT of Euros 335 billion, an increase of 4.7 percent.
The telecommunications market did less well last year, increasing by just 1.5 percent to Euros 348 billion, with the group predicting growth for the year at 1.1 percent to reach Euros 352 billion by the end of 2007.
Broadband Internet is already standard in companies and private households are catching up, Lamborghini added, with 42 percent of households in Western Europe already having fast network access. Mobile data services are also increasingly in demand.
However, this is counterbalanced by a slowing of revenues from fixed telephony services by about five percent a year.
Lamborghini added the market for consumer electronics "has further potential for growth." According to EITO, the Western European CE market is currently increasing by only around 2.5 percent.