Companies offering VoIP services have been gnawing away at revenue by offering lower-priced telephone service.
New York, NY (PRWEB) June 05, 2014
Over the past decade, rapid technological advancements have changed the way humans interact, quickly pushing the Wired Telecommunications Carriers industry to the sidelines of communication. External competitors in the Wireless Telecommunications Carriers (IBISWorld report 51332CA) and voice over internet protocol (VoIP) industries have been eating away at industry revenue from the industry's core product, local and long distance telephony services. Although industry operators have somewhat hindered the decline by offering internet access and internet protocol television (IPTV) services, the increase in both has not been strong enough to save the industry from decline. Over the five years to 2014, revenue is expected to contract reaching an industry low. In 2014, revenue is expected to decrease.
The boom in smartphone popularity combined with the decline in the price of standard mobile telephone plans caused the number of mobile telephone subscriptions to increase rapidly in the past five years. Although households with high incomes initially purchased both wireless and wireline services, the number of wireless-only households has been increasing. According to the Convergence Consulting Group, about one-quarter of all Canadian households will be wireless-only in 2014. Additionally, according to IBISWorld Industry Analyst Sarah Kahn, “companies offering voice over internet protocol (VoIP) services, using a technology that transmits voice in data packets using internet protocol technology, have been quickly gnawing away at revenue by offering lower-priced telephone service.” Since calls using the internet do not cost more if they are long distance, “revenue from the industry's long-distance telephony service has suffered the most,” says Kahn.
The Wired Telecommunications Carriers industry exhibits a high level of concentration. Over the five years to 2019, revenue is expected to fall at a faster rate. Industry operators will continue offering service bundles, providing consumers with the data and video services they thirst for in order to make up for losses from telephony. By investing in broadband fibre deployment, companies will be able to use the same infrastructure to provide voice, data and video services. Nevertheless, spreading their fixed costs across the declining number of subscribers and competing with substitute services offering lower prices, revenue and profit margins are expected to continue declining steadily.
For more information, visit IBISWorld’s Wired Telecommunications Carriers in Canada industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld.
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189.
IBISWorld industry Report Key Topics
This Wired Telecommunications Carriers industry provides local and long-distance telephony services. Industry operators also generate revenue by wholesaling access to their networks for a variety of purposes.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US and Canadian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld 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.