Demand for industry services is declining as newer communications technologies take over.
Los Angeles, CA (PRWEB) September 25, 2013
Although the Wired Telecommunications Carriers industry was once the principle provider of voice communication services, numerous substitutes have taken its place. Wireless telephony and voice over internet protocol (VoIP) technology have especially siphoned revenue away from the industry. At the same time, however, industry operators have benefited from increasing demand for internet access, mitigating declining demand for its traditional products. Because demand for more robust internet access outweighed the effects of decreased demand for wired voice telephony, industry revenue is expected to increase an annualized rate of 2.1% to $130.3 billion over the five years to 2013. Revenue is projected to increase 1.6% in 2013, as consumers increasingly demand more reliable and higher speed internet access.
According to IBISWorld Industry Analyst Jesse Chiang, “Wired telecommunications carriers have begun deploying optical fiber networks that provide faster speeds and larger bandwidth capacity than cable or wireless networks in order to compete with providers of substitute technologies.” For example, major players like Verizon and AT&T provide video services via an internet protocol television network; these services are typically bundled with internet access and voice telephony and are experiencing increased adoption as carriers expand their network footprint. The development of fiber-optic networks has also partially mitigated declining demand and revenue for wired voice telephony services.
Major telecommunications players are diversified across several different sectors of communications, including internet access and video services. As such, they will likely continue focusing on and expanding more in-demand services like high-speed internet and decreasing the scope of the Wired Telecommunications Carriers industry. The number of subscriber access lines (i.e. wires that connect an end-user to a local telephone office) is projected to contract during the same five-year period. Meanwhile, according to Chiang, “the number of mobile internet connections, a key indicator of the mobile threat to both wired telephony and broadband internet, is expected to grow.” Furthermore, the industry exhibits a high level of concentration, with AT&T Inc., Verizon Communications Inc. and CenturyLink Inc. being the top three companies in this industry.