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Declining Prices Pose Challenges for the U.S. Communication Services Industry - New analysis from Frost & Sullivan, U.S. Communications Services Overview, reveals that revenue in this industry totaled $387.4 billion in 2004 can reach $422.5 billion in 2011.
Declining Prices Pose Challenges for the U.S. Communication Services Industry

 

NewswireToday - /newswire/ - Palo Alto, CA, United States, 2005/09/30 - New analysis from Frost & Sullivan, U.S. Communications Services Overview, reveals that revenue in this industry totaled $387.4 billion in 2004 can reach $422.5 billion in 2011..

   
 
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Owing to the dot-com bubble and the rapid growth in the e-economy, the late 1990s and early 2000s witnessed a splurge in investments in the U.S. communication services market. Consequently, the present marketplace is fraught with overcapacity and hyper competition leading to price pressure across all communication verticals. Most verticals have seen average prices falling by over 10 percent annually and continued price erosion due to intensifying competition, remains the largest challenge facing participants in the U.S. communication services market.

New analysis from Frost & Sullivan (telecomservices.frost.com), U.S. Communications Services Overview, reveals that revenue in this industry totaled $387.4 billion in 2004 can reach $422.5 billion in 2011.

If you are interested in a virtual brochure, which provides manufacturers, end users and other industry participants an overview of the latest analysis of the U.S. Communications Services Overview, then send an email to Mireya Castilla, Corporate Communications at mireya.castilla[...]frost.com with your full name, company name, title, telephone number, fax number, e-mail, city, state and country. Upon receipt of the above information, an overview will be sent to you by e-mail.

With multiple carriers offering similar services, the average U.S. consumer now receives communication services at 3.6 percent above cost. This in turn has a profound impact on profit margins and creating a defendable and profitable niche, that is becoming extremely difficult for participants in the U.S. communication services market.

“By far the largest trend in the U.S. communications services market is the ongoing wireless replacement of wireline services,” explains Frost & Sullivan Industry Analyst Daniel Longfield. “Home phone service penetration rates have peaked, and with many consumers replacing their home wirelines with wireless phone services, wireline services could loose as many as 100 million customers by 2010.”

The U.S. wireline industry is clearly on a rapid decline and of the three wireline carriers, AT&T, MCI, and Sprint – the first two have been sold and Sprint is restructuring its operations to include the sale of some of its wireline business.

On the other hand, the subscriber base for wireless services continues to grow by more than 10 percent annually and although Internet service is not seeing the same level of subscription growth, broadband replacement of dial-up connections is ensuring a healthy growth in Internet access revenues.

The cable and satellite industry is approaching saturation with almost 90 percent penetration rates and as such very little growth can be expected. While content on demand promises renewed opportunities for cable and satellite vendors, it has the potential to cut into advertising revenues and there is also a likelihood of considerable competition from Internet service providers and eventually even wireless carriers.

However, the satellite radio sector with a penetration rate of fewer than five percent could see enormous growth in the coming years.

“Wireless services expect to see the highest growth in penetration rates. Apart from the replacement of wireline services, wireless internet applications promise healthy revenues,” says Longfield. “In ensuring their profitability, companies will need to outlast the majority of under-funded, unprofitable competitors and await price stability.”

U.S. Communications Services Overview is part of the Wireless & Mobile Communication subscription. It presents an exhaustive study of the wireless, wireline, cable and satellite television, as well as Internet access markets and details where each of these verticals overlap while offering comparable services to consumers. Further, it includes a thorough end-user analysis section where historical subscriber numbers and penetration rates for all verticals are included along with forecasts. Executive summaries and analyst interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics.

U.S. Communications Services Overview
F446

Contact:

Janina Hillgrub
Corporate Communications – Europe
P: +49 (0) 69 77 0 33 11
F: +49 (0) 69 23 45 66
E: janina.hillgrub[.]frost.com

Sarah Lourdes
Corporate Communications – Asia Pacific
P: +603 6204 5878
F: +603 6201 7402
E: sarah.lourdes[.]frost.com

Keywords in this release: communication services, U.S., wireline services, wireless services, cable and satellite services, internet services, broadband, content on demand, satellite radio, wireless Internet applications, research, information, market, trends, technology, service, forecast, market share

 
 
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Declining Prices Pose Challenges for the U.S. Communication Services Industry

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Publisher Contact: Mireya Castilla 
210.247.3830 mireya.castilla[.]frost.com
 
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