Telecom Revenue Forecast: Sunny with Cloud Cover

The US telecommunications sector, which endured a revenue decline in 2009 due to the struggling economy, is on track for steady growth, with spending projected to climb from $985 billion in 2010 revenue to $1.2 trillion in 2014.

That's according to a preview of the Telecommunications Industry Association's 2011 Market Review and Forecast. A major area of growth will be in cloud computing, though some of the gains will be offset by declines in hardware purchases, since companies will be able to shift more of their operations to the Internet, the preview says. Despite the rosy forecast, stormy weather is ahead in the form of capacity shortages for communications networks, though the constraints could result in increased spending on infrastructure. And with rates for broadband service on the rise, growth in subscriptions could slow, though overall revenue for high-speed Internet service is expected to remain stable.