Telecommunications Services

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Telecommunications Services

SIC 4810

NAICS 517

The rapidly changing field of telecommunications services includes local, long distance, and international telephone services, as well as cellular and other mobile phone and paging services. A number of industry firms also transmit cable television services and offer Internet access. See also Cable and Other Pay-Television Services and Internet Services for further coverage of these activities. Many telecoms also have historical ties to communications equipment manufacturing, which is discussed separately in this chapter under Telecommunications Equipment.

INDUSTRY SNAPSHOT

The widespread availability of telephone and other telecommunications services in the United States becomes vivid considering that one-third of the world's population has never made a telephone call, according to the International Telecommunication Union (ITU). In 2003, there were approximately 2.5 billion people served by telephones, an average of 40.32 telephone lines per 100 people, with ranges from 8.65 per 100 to 96.28 per 100, depending on the world region. But one need only glance at KMI Corp.'s cybermaps of existing and planned fiber-optics installation to know that the one-third statistic will become outdated in an astonishingly short time. In particular, many humanitarian groups are raising funds to get cell phones into underserved areas in Africa, Asia, and South America for humanitarian purposes.

As late as 1993, fixed lines outnumbered cell phones 12 to one. However, by 2002 the number of cell phones outnumbered fixed telephone lines, and the margins continued to grow wider. Mobile phone usage is highest in developing counties, especially China and India, according to the ITU. Ironically, mobile calls in the United States and Canada were stalled or decreasing as a result of a fee system charging a cost to both callers and receivers on cell calls.

According to the ITU, investment in telecommunications infrastructure was more than US$200 billion in 2000, and by 2003 it had reached approximately US$215 billion. That year, the global telecommunications services industry generated revenues of an estimated US$1.3 trillion. National telephone service represented 33 percent of the world's telecommunications service revenues, while international service accounted for 5 percent and mobile service for 30 percent.

The leading trends in the telephone services industry included privatization of state-owned monopolies, the opening up of telephone service markets to overseas competition, and deregulation. Other significant trends were the continuing rapid growth of the wireless telephone service segment, the expansion of telephone services in developing countries, and the internationalization of the industry through alliances, joint ventures, and investments. Many of these trends stemmed from the World Trade Organization's 1997 telecommunications agreement between its member countries. The agreement established policies for opening up the wor...

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