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Author: Cornelia Wels-Maug
Bitkom, the German IT and telecommunications trade association, has presented its forecast on the development of the German ICT market for the current year and 2007. For the first time, it included the market for digital consumer electronics in its estimates, alongside the established categories of IT and telecommunications.
For 2006, the overall ICT market is expected to grow by 2.5% to €146.4bn, with a lowered growth for 2007 of 1.6% to €148.8bn. It will remain the strongest segment, with 47.7% of total revenues, slightly increasing to 48.8% in 2007. IT, which mainly comprises three sectors, is forecast to reach revenues of €69.9m in 2006, with IT services up 5.5% at €29.1bn, hardware down 1.7% at €23.8bn, and software up 5.5% at €17bn. For 2007, the IT sector is expected to grow at 1.4%, slightly below the overall ICT average, to €71.9bn, with IT services up 4.6% to €30.5bn, up 5.5%. Hardware is forecast to be down 1.2% to €23.5bn, and software up 5.7% to €17bn.
The telecoms segment is expected to grow by 0.5% to €66.4bn in 2006 and to €66.3bn in 2007, down 0.2%, representing 45.4% of the overall market in 2006 and 44.6% in 2007. Telecommunication services (fixed-line voice and data as well as mobile and cable-TV) are at the core of this segment with €56.6bn, up 0.9%, helped by spending of €9.8bn for telecommunication terminals and infrastructure, down 1.3% in 2006. Revenues for mobile communication are estimated to be €23.9bn, up 2%, and fixed-line revenues are at €18.8bn, down 4.5% in 2006. For 2007, services are expected to be stable at €56.6bn, with spending on terminals and infrastructure down 1.4% at €9.7bn.
Bitkom's president, Willi Berchthold, appealed against additional strains on the high-tech sector during 2007 in the form of a rise in value-added tax (from 16% to 19%), the introduction of copyright fees on PCs (almost €50 per item) as well as licence fees on PCs and mobile phones based on the argument that both devices enable the reception of television and radio transmissions.
Comment: Bitkom's market forecast is in line with what we have seen so far this year: software companies have reported good sales, abroad and at home, with the IT services market being the jewel in the crown. Companies have finally started modernizing their IT systems, even the German Government has given the go-ahead to a long-pending contract (see EuroView Daily, 30 August), though there are still more projects in the queue.
However, price erosion, particularly in the hardware segment, is having a harsh impact. The government's efforts to give a new impetus to the IT sector as a growth engine are sadly being counteracted by the introduction of questionable fees, which will affect the 9.1m PCs that Bitkom forecasts will be sold next year.
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