Prices have declined slightly as the market approaches saturation and price-based competition rises
Los Angeles, CA (PRWEB) November 16, 2014
The cellular telephone services market has a buyer power score of 4.4, indicating a high degree of negotiating power for buyers. Buyers benefit significantly from falling prices and low market risks; however, buyer power is lowered slightly by very high market share concentration.
Because this service has a low level of specialization, there is intense price-based competition despite high market share concentration. As a result, prices have fallen to an eight-year low in 2014 despite higher demand, according to market research firm IBISWorld. Providers have gained extremely high economies of scale through acquisitions of smaller companies, allowing them to lower their variable operating costs and, thus, offer cellular telephone services at lower prices.
Buyers also benefit from low market risks. Most providers are very large public companies that offer a wide variety of telecommunication services and experience steady demand. As such, IBISWorld estimates that bankruptcy risks and supply chain risks are very low for these companies, which ensures buyers have steady access to cellular telephone services.
Conversely, buyer power is hurt by extremely high market share concentration. The top four brands in the market are Verizon, AT&T, Sprint Nextel and T-Mobile. With such high market share, the buyer has little choice but to turn to these companies for services, especially if the buyer is also a large company. High market share concentration does have some benefit, though: it helps the standardization of services. When one provider lowers their prices or offers new services, other providers are quick to follow. For more information, visit IBISWorld’s Cellular Telephone Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of cellular telephone services. Cellular telephone service suppliers provide direct communication through radio-based cellular networks. Services include cellular mobile phone services, paging services and wireless internet access. This report focuses on cellular telephone services for businesses and corporations rather than consumers. 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.