Although price growth will be tempered by high market competition, suppliers will still be able to increase prices slightly due to continued rising demand for services
Los Angeles, CA (PRWEB) March 02, 2015
Network voice services have a buyer power score of 3.7 out of 5, indicating that buyers have a slight advantage over suppliers in negotiations. “Moderate switching costs and specialization allow buyers to freely choose between suppliers without risking significant costs or declines in quality,” according to IBISWorld business research analyst Daniel Krohn. Buyer power is limited, however, by rising prices and the low availability of substitutes, which reduces buyers' options and negotiating leverage. Prices have been rising in the past three years as demand has grown in line with the increasing number of businesses that use network voice services for various communication needs.
Network voice services are only moderately specialized, and basic services are minimally different across suppliers. While buyers do require suppliers that have sufficient understanding of voice network setup and equipment, there are numerous operators that can fulfill these requirements. There are some switching costs for network voice services because buyers may be charged termination fees when cancelling contracts with their current supplier. Still, moderate service specialization and switching costs provide buyers with a wider range of suppliers to source from and switch between without facing higher costs or lower-quality service. “As a result, buyers can select a supplier based on price rather than expertise,” says Krohn.
However, the lack of direct substitutes for network voice services significantly limits buyer power. Buyers can communicate via free voice-over-internet-protocol (VoIP) software, but they will still have to spend capital if they want to make calls to land lines or mobile devices. In addition, the price of network voice services has continuously risen in the three years to 2014. To mitigate price growth, buyers should seek contracts or discounts based upon the breadth of services needed. Major vendors include Comcast, AT&T and Verizon. For more information, visit IBISWorld’s Network Voice Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of network voice services, which involve helping businesses with setting up business phones, teleconferencing, web conferencing and other voice solutions. This report does not include other network management services.
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.