Traditional services suffer as mobile technologies become more popular
London, United Kingdom (PRWEB) May 20, 2013
The Wired Telecommunications Carriers industry operates, maintains and provides access to facilities for the transmission of voice, data, text, sound and video using a wired telecommunications infrastructure. In 2013-14 total industry revenue is forecast to decline by 4.0% to £11.3 billion. This will be consistent with the industry's performance over the five years to 2013-14, with revenue expected to decline at a compound annual rate of 6.0%. According to IBISWorld industry analyst Andrew Johnson, “the poor performance has been driven by the improved quality and variety of substitute products and changing preferences for communications in both the consumer and business markets."
Carriers have been affected by the changing ways in which people communicate, with a preference towards mobile and digital technologies at the expense of traditional wired telecommunications services. In addition to increased substitution threats, technological innovation has facilitated the introduction of new substitute services that are absorbing existing revenue streams of wired telecommunication companies (telcos). The growth of fixed-line broadband has helped support the operators of the fixed-line network, but communication options, such as VoIP, that operate using internet platforms, increased choice and competition in the telecommunications market, negatively affecting demand and prices. Industry operators have fared reasonably well with declining revenue by bundling traditional services with growing ones to enhance revenue across different related industries.
The industry's decline will continue over the five years to 2018-19, as alternative options continue to flourish, such as voice services over the internet. This will be facilitated by the greater capacity made available by the transition of the wired network to fibre-optic cables and the development of 4G mobile internet. Johnson adds, “the decline in the major revenue stream means that major telcos will have to change their traditional business models to accommodate the growing demand for data services and compete with the speeds offered by 4G mobile networks”. Convergence of audio, video, data and voice communications will continue to influence the services offered by operators in order to compete in a declining industry.
The Wired Telecommunications Carriers industry has a high level of market share concentration as the top four industry participants’ account for about 83% of industry revenue. The industry is highly concentrated despite the significant increase in competition that has occurred since 1984 as a result of regulatory changes. The industry is extremely capital intensive and one of the key success factors is beneficial economies of scale. The exhaustive capital expense required to create a copper network to compete with BT's has been a major stumbling block for potential competitors.
Consequently, the industry is still dominated by the incumbent BT, which is forecast to account for 67.3% of industry revenue in 2012-13. Other major companies include Virgin Media and Cable and Wireless Worldwide.
For more information on the Wired Telecommunications Carriers industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Industry participants operate, maintain and provide access to facilities for the transmission of voice, data, text, sound and video using a wired telecommunications infrastructure. The industry also includes participants that purchase access and network capacity from infrastructure owners. The industry does not include Telecommunication Resellers or Internet Service Providers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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