Major players' margins have expanded as customers flocked to 4G-capable firms
Los Angeles, CA (PRWEB) August 30, 2012
The Push-to-Talk Over Cellular (PoC) Providers industry is expected to decline at an average rate of 1.2% annually over the five years to 2012. The 2008 and 2009 recession put a significant damper on revenue, as industry revenue fell from $1.1 billion in 2007 to only $939 million in 2009. This drop occurred primarily due to a decreased number of employees in the United States and falling business activity during these years, as business users comprise a large majority of the industry's market. “Consumer demand also fell,” says IBISWorld industry analyst Dale Schmidt, “as contractions in per capita disposable income caused consumers to cut PoC services from their mobile phone plans.” However, the slow economic recovery in recent years has benefitted the industry, and improvements in employment and disposable income are expected to lead to 1.9% growth in industry revenue in 2012 to $1.0 billion.
Over the past ten years, the industry has benefitted greatly from the population's switch from wired phone connections to mobile phone connections. But the rise in popularity and availability of smartphones has had a negative effect on demand due to the existence of smartphone apps that mimic PoC services. The Push-to-Talk Over Cellular (PoC) Providers industry is currently in a state of consolidation as users flock to the major companies who have the resources to invest in infrastructure for 4G networks, the newest standard for wireless communications. In addition, says Schmidt, “Sprint Nextel has announced it will shut down its Nextel network, leaving its 10 million users essentially up for grabs.” Consolidation has increased the industry's average profit margin, but mostly due to the higher standing of the industry's top players, Verizon and AT&T, which generate profit margins well above the industry average.
Over the five years to 2017, the industry is expected to grow steadily. As during the period from 2010 through 2012, this growth will primarily come as a result of growth in the number of employees and per capita disposable income. Also, the switch to 4G networks as the main network standard will boost demand as call connection times are reduced to essentially zero. However, smartphone apps will continue to siphon away demand. For more information, visit IBISWorld’s Push-to-Talk Over Cellular (PoC) Providers in the US industry report page.
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IBISWorld industry Report Key Topics
This industry includes traditional wireless telecommunications carriers that offer push-to-talk over cellular (PoC) as an add-on service. This industry consists of PoC as an add-on service and excludes land mobile radio (LMR) communications.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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