Service providers will likely raise prices to pay for infrastructure upgrades
Los Angeles, CA (PRWEB) May 19, 2014
The cellular telephone services market has a buyer power score of 3.8, indicating a moderately high degree of buyer power when negotiating a contract. According to IBISWorld procurement analyst Natalie Everett, “because this service has a low degree of specialization, there is a high degree of price-based competition despite the market's high concentration.” Prices have trended to an eight-year low in 2013, underscoring this trend and providing a welcoming atmosphere to buyers. Also, there is a low level of price volatility, despite a high degree of price driver volatility.
Service providers offer a generally standardized service to buyers, which includes talk minutes, optional texting and data plans. There is an array of features provided by cellular phone carriers, and they are remarkably interchangeable. Once one provider introduces a new service, the other major players are quick to follow suit. The top four players in the market are Verizon, AT&T, Sprint Nextel and T-Mobile (owned by Deutsche Telekom). “These four players jockey for market share,” says Everett. Acquisitions have become a major strategy toward gaining market share. Once a competing regional carrier builds a sizable subscriber base, one of the top four attempts acquisition.
While high market share concentration does not always favor buyers, the fact that the top four players are fiercely competitive among themselves has been a boon to buyers. Because the services are interchangeable, these four compete on price instead. Smaller, regional service providers are worth considering too, because they usually have licensing agreements with one of the big four to provide nationwide service; therefore, they can offer similar service at comparable, but often not lower, rates, and potentially higher levels of customer service
For more information, visit IBISWorld’s Cellular Telephone Services procurement category market research report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld.
Like IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189.
IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of cellular telephone services. Cellular telephone services suppliers provide direct communication through radio-based cellular networks. Services include cellular mobile phone services, paging services and wireless internet access. This report does not include telecommunications resellers.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.