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U.S. TELECOM INDUSTRY WHOLESALE REVENUES TO DOUBLE IN FIVE YEARS JUNE 17, 1999 - WHOLESALE MARKET PARSIPPANY, NJ, June 17, 1999 -- Telecommunications industry wholesale revenues will more than double over the next five years, according to a preliminary survey of the industry by Phillips InfoTech of Parsippany. And as deregulation allows new entrants in providing telecommunications services, revenue for these new competitors will surge by a factor of ten, the survey said. "This explosion of competition from entrepreneurial startups, combined with accelerating technological change and soaring capacity, is creating a wholesale market for network time, as telecommunications providers buy and sell capacity from each other," said Richard (Rick) Kent, vice president of Phillips InfoTech. "It's similar to the way utility companies trade electric power to fill temporary surges in demand," he explained. And if the data in the preliminary survey are supported by a planned full study to be completed by September, this wholesale revenue could show an increase of 166 percent, from the 1998 total of $37.49 billion to an estimated $99.88 billion in 2003, according to the survey. "This is a potential market that no telecommunications executive can afford to ignore," Kent said. Results of the survey were released at a conference in Dublin, Ireland, on Thursday, June 17, during Kent's presentation to delegates at the Carrier Wholesale Market Conference and Trading Floor. The conference is sponsored by PBI Media, a publishing and consulting firm based in Potomac, MD. Parsippany-based Phillips InfoTech is a subsidiary of PBI Media, specializing in the telecommunications industry. The complete study, titled "Wholesale Carriers Services: U.S. Market Supply and Demand and Growth of IP (Internet Protocol) Wholesale," will be supplied exclusively to corporate sponsors, and will detail key demand factors for the wholesale carrier services market, changes in market structure, evolution of business models, and lessons to be gleaned from changes in the U.S. market. Results of the study will identify key players who are and will be suppliers of wholesale telecommunications capacity, potential buyers of telecommunications capacity and the types of products and services demanded, as well as the potential market for Internet service capacity and the role of wholesale market clearing houses. "The principal objective of the study is to enable clients to make faster and better decisions about broadband access deployment and alternatives," Kent said. That strategy is at the core of PBI Media's service, he noted. "Our emphasis is on the analysis of information and its application to our clients' business problems and opportunities," Kent said. The preliminary survey showed the U.S. Regional Bell Operating Companies (RBOCs) leading in wholesale telecommunications revenue, with a total of $17.28 billion in 1998. RBOC revenues for 1999 are expected to exceed $20.73 billion, and will leap to nearly $43 billion by 2003, the survey said. The Big Three Interexchange Carriers -- AT&T (NYSE:T), MCI (NASDAQ: WCOM) and Sprint (NYSE: FON) -- will see their total revenues move from $13 billion in 1998 to $15.47 in 1999, and double to $30.89 billion in five years. Other local exchange carriers -- smaller telephone companies -- will have revenue growth from $3.96 billion in 1998 to $4.55 billion this year, rising to $7.97 billion in 2003. The biggest growth rate, however, will be among new entrants to the industry, known as competitive local exchange carriers (CLECs). These firms posted total revenues of $250 million in 1998 and are expected to bring in $400 million this year. But in five years, CLEC revenues are anticipated to multiply ten-fold, to $2.62 billion in 2003, according to the preliminary Phillips InfoTech survey. Cable television companies, which are just now entering the telecommunications and Internet service provider market, will have total revenues of $1 billion in the year 2000, rising to $1.9 billion in 2003. "The wealth of new products and services created by competition in the U.S. telecommunications market has brought major lessons," Kent said, "which can be used effectively by executives worldwide as deregulation spreads and competition expands." "The pace of change in the telecommunications market is accelerating," Kent pointed out, "with technology and deregulation driving that change, attracting new players and creating new markets." "Entrepreneurs and other new entrants will push even faster change," he added, "forcing companies to adjust incentive programs to keep executive talent." Moreover, "the telecommunications industry is consolidating on a global scale, and the driving forces that remade the American telecommunications industry will also drive changes in the European market," Kent told the conference delegates. Sponsors of the study will receive two copies of the final report, which will include detailed forecasts of market activity and analysis of specific segments, along with implications critical to each client segment. Cost to each sponsor will be $8,950 if agreed to by July 15, 1999, and $11,000 thereafter. Kent leads a Phillips InfoTech market research and information team at that provides critical data and trend information for strategic planners in the telecommunications industry. He is a veteran of 20 years experience in the telecommunications industry, including 18 years at AT&T. Note: Further information about study sponsorship can be obtained from PBI Media-InfoTech, 90 East Halsey Road, Parsippany, NJ 07054. Tel: (973) 884-0100; Fax: (973) 884-8804; email: infotech@accessintel.com. |
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