Press Release

U.S. Telecom Wireless Market Estimated to Bring Home $260.6 Billion in 2016, Less Optimistic Numbers for Wireline Market


May 28th, 2012

Global Information Inc. would like to present a new market research report, "Telecom Services in Vertical Markets, 2011-2016" by Insight Research Corporation.

INSIGHT estimates that the total US telecom wireless market posted $175.5 billion in 2011. The wireless market will continue to grow over the next five years at a CAGR of 8.2 percent, reaching $260.6 billion in 2016, as shown in Figure I-4.

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Telecommunications products and services are, by their very nature, commodity products, since they exhibit little or no customization. Telecom providers recognize the commodity nature of their product when they market horizontally - offering everything to everyone, everywhere. Horizontal marketing provides generic "one-size-fits-all" offerings. In contrast, vertical marketing focuses on developing solutions to user problems within specific industries. In this market analysis report our thesis is as follows: with competition eating into already anemic profit margins, solution selling by vertical industry becomes an attractive way for telecommunications vendors to differentiate and a viable way to maintain profitability and sustained growth. Four principal growth factors affect telecommunications expenditures significantly, as shown in Figure I-1.

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With a stagnant economy the business opportunities for telecommunications providers in the enterprise market seem harder to find than ever before.

U.S. telecom wireline market shows negligible growth rate

INSIGHT estimates that the total US telecom wireline market reached $162.9 billion in revenue at the end of 2011. INSIGHT predicts the market will increase slowly to $167.9 billion by the end of 2016, representing a negligible compound annual growth rate (CAGR) of 0.6 percent over the forecast period, as illustrated in Figure I-2.

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INSIGHT estimates that businesses spent $82.7 billion on wireline services in 2011.

Over the forecast period, an increasing percentage of the business revenue growth will come from enhanced services, often for vertical industries, as telecom providers seek to avoid damaging price competition by positioning their services as value-added solutions rather than commodities.

Four vertical industries stand out as having the leading expenditures in the telecom industry: wholesale trade; financial, insurance, and real estate services; professional business services; and communications. These four industry categories accounted for nearly 68 percent of total business telecom expenditures by the end of 2011. In fact, if these top-tier industry segments were combined with two other industry segments - durable manufacturing and healthcare - the combined tier would account for over 81 percent of total business telecom expenditures. Naturally, it is these industries on which INSIGHT recommends telecom providers focus their vertical marketing efforts.

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In contrast, the four vertical industries that lead in wireless expenditure include construction, financial, insurance and real estate, professional business services, and transportation. Together, these four industries account for 46 percent of all business wireless expenditures in 2011, as reflected in Figure I-5.

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Global Information Inc.(GII) - specializing in market research provision for the vertical industries, GII offers expert independent recommendations of publications from hundreds of the globe's leading market research firms.

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