New Subscribers to Telecom Services Continues Growing in 2005

Continuing consolidation in the US telecommunications industry is creating winners and losers in the service provider segments, but the industry continues to add new subscribers, says a new report from Insight Research. According to the study, the wireless segment is the clearest winner.

Wireless companies will be adding new subscribers at a rate nearly double the overall subscriber growth rate of the industry, while competitive local exchange carriers (CLECs) also increase their subscriber base. The report contends that cable companies will add subscribers at a modest pace, while the incumbent local exchange carriers (ILECs) face a gradual loss of subscribers, as wireless calling is substituted for land line calling and the long distance interexchange carrier (IXC) segment loses subscribers through industry consolidation.

According to the report, US network operators are expected to add subscribers at a compounded rate of 2.9% between 2005 and 2010. The report notes that the increase in wireless subscribers comes at the expense of local and long distance companies. Residential customers are using free nights and weekends to make their LD calls, and are substituting wireless services for a local wireline connection. The cable companies, which long enjoyed a first mover advantage in deploying video services and later Internet access, are facing dimming prospects as they meet with competition in their core markets.

"The number of subscribers signing up for telecommunications services continues to grow, and at a rate comparable to growth of the GDP, which means the growth is sustainable since it harkens back to historic norms," says INSIGHT president Robert Rosenberg. "However, the growth in subscribers we are seeing is by no means evenly divided between the wireless, CLEC, ILEC, IXC, and cable company segments. There are real winners and losers in the segments, so further industry consolidation is probably in the offing," concluded Rosenberg."

Posted to the site on 10th May 2005