External Analysis of the Telecommunication Industry
External Analysis of the telecommunication industry
Economic • Market analysis by Insight Research predicts that telecommunications-industry revenue will reach $1.2 trillion by the end of next year, and grow by a compounded rate of 5.9 percent to $1.6 trillion by 2010.
• Telecommunication remains an important part of the world economy and the telecommunication industry's revenue has been placed at just under 3% of the gross world product.
• Mobile phones have had a significant impact on telephone networks. Mobile phone subscriptions now outnumber fixed-line subscriptions in many markets. Sales of mobile phones in 2005 totaled 816.6 million with that figure being almost equally shared amongst the markets of Asia/Pacific (204 m), Western Europe (164 m), CEMEA (Central Europe, the Middle East and Africa) (153.5 m), North America (148 m) and Latin America (102 m)
• In terms of new subscriptions over the five years from 1999, Africa has outpaced other markets with 58.2% growth
• Size matters in telecom. It is an expensive business; contenders need to be large enough and produce sufficient cash flow to absorb the costs of expanding networks and services that become obsolete seemingly overnight. Transmission systems need to be replaced as frequently as every two years. Big companies that own extensive networks - especially local networks that stretch directly into customers' homes and businesses - are less reliant on interconnecting with other companies to get calls and data to their final destinations. By contrast, smaller players must pay for interconnect more often to finish the job. For little operators hoping to grow big some day, the financial challenges of keeping up with rapid technological change and depreciation can be monumental.
• During the late 1990s, the telecommunications industry experienced very rapid growth and massive investment in transmission capacity. Eventually this caused supply to significantly exceed
Economic • Market analysis by Insight Research predicts that telecommunications-industry revenue will reach $1.2 trillion by the end of next year, and grow by a compounded rate of 5.9 percent to $1.6 trillion by 2010.
• Telecommunication remains an important part of the world economy and the telecommunication industry's revenue has been placed at just under 3% of the gross world product.
• Mobile phones have had a significant impact on telephone networks. Mobile phone subscriptions now outnumber fixed-line subscriptions in many markets. Sales of mobile phones in 2005 totaled 816.6 million with that figure being almost equally shared amongst the markets of Asia/Pacific (204 m), Western Europe (164 m), CEMEA (Central Europe, the Middle East and Africa) (153.5 m), North America (148 m) and Latin America (102 m)
• In terms of new subscriptions over the five years from 1999, Africa has outpaced other markets with 58.2% growth
• Size matters in telecom. It is an expensive business; contenders need to be large enough and produce sufficient cash flow to absorb the costs of expanding networks and services that become obsolete seemingly overnight. Transmission systems need to be replaced as frequently as every two years. Big companies that own extensive networks - especially local networks that stretch directly into customers' homes and businesses - are less reliant on interconnecting with other companies to get calls and data to their final destinations. By contrast, smaller players must pay for interconnect more often to finish the job. For little operators hoping to grow big some day, the financial challenges of keeping up with rapid technological change and depreciation can be monumental.
• During the late 1990s, the telecommunications industry experienced very rapid growth and massive investment in transmission capacity. Eventually this caused supply to significantly exceed