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Competition Among The Telecommunications Industry Essay, Research Paper

There are currently 807 companies in the TIA (Telecommunications Industry Association) database of companies. Of the 807 companies, 251 of them currently offer wireless services. Also 281 offer broadband services, of those offering broadband 160 of them offer cable, 72 offer DSL (Digital Subscriber Line), and 49 offer T-Carriers. There are currently 242 member companies in the MMTA (Multimedia Telecommunications Association) Database of companies. Of those 242, 70 of them offer broadband services. Of those 70 15 offer DSL, 24 offer Cable, and 31 offer T-Carriers. Also among those 242 in the MMTA’s database 60 companies offer Wireless services. In a worldwide Yahoo!? search, 224 companies offered Broadband, 227 offered Satellite services, 295 offered Long distance and 533 offered Wireless.

The U.S. long-distance market is worth an estimated $100 billion to $110 billion per year. The largest long-distance carriers in the U.S. are AT&T, MCI WorldCom, Sprint, Excel (now part of Teleglobe Canada), and Frontier (with a merger pending with Global Crossing). AT&T, MCI WorldCom, and Sprint control the bulk of the U.S. long-distance market, but competition is increasing from the other carriers. The U.S. local telecommunications market is worth somewhere in the range of US$100 billion to US$120 billion and is still over 95% controlled by the RBOCs and incumbent local exchange companies. The competitive local exchange carriers and other competing companies hold about 4% to 5% of the market. There are now only five RBOCs, those being Bell Atlantic (having acquired NYNEX), SBC (having acquired Pacific Telesis), BellSouth, U S WEST, and Ameritech. Soon we may be down to four RBOCs, if the FCC and other regulatory bodies approve the pending merger of SBC and Ameritech.

It has become extremely difficult to segment voice and data traffic services and revenues in the U.S. market. Voice traffic has historically always represented the bulk of the traffic and revenues in the telecommunications market; however, recent estimates are that voice traffic is growing at a very low (single-digit) percentage rate, while data traffic may be growing at a rate as high as 200% to 300% per year.

The cable television/video delivery services part of the telecommunications industry includes the traditional (wired) cable TV providers, wireless cable TV providers, and satellite TV providers.

The traditional (wired) cable TV industry serves about 65 million U.S. households, with the five largest cable multiple system operators (MSOs)–AT&T (via TCI), Time Warner, Comcast/MediaOne (whose merger is pending), Adelphia, and Cox Communications–serving nearly 45 million of those households.

The fastest-growing segment of the telecommunications industry today is still the Internet market. Possibly as a result of the fact that the Internet industry is not yet regulated and strictly controlled by the government (and the FCC), there is a tremendous amount of competition in this market and a vast number of service providers At the end of 1997, it was estimated that there were some 6,000 ISPs worldwide, with about 4,500 of them located in the U.S. Gartner Group: Analytics has predicted that the number of ISPs in the U.S. will shrink to around 500 by 2002, as many smaller ISPs go out of business altogether and the survivors merge or are acquired by other telecommunications service providers. This trend is certainly well under way with the number of acquisitions and mergers that have taken place in the past year.

The U.S. has one of the most extensive and advanced telecommunications networks in the world. At the end of 1998 (according to FCC figures), there were about 104 million households in the U.S., and just over 94% of them had at least one telephone, with a goodly number of them (in the 10% to 20% range) having two or more telephone lines. As of the end of 1997, the RBOCs had about 9,900 central office systems installed in the U.S. Nearly 95% of these were digital, and the RBOCs served a total of some 132 million access lines (out of a total of about 174 million access lines in service across the U.S.). Of these 174 million access lines in the U.S., the CLECs are believed to serve only about 5 million, which leaves around 37 million served by the ILECs, including GTE, Sprint, and others.

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