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Currently the Telecommunications industry is in a state of flux. The industry is reporting record growth rates but at the same time is seeing diminishing returns. Subsequently stock prices and the value of these companies are falling. Focusing on two industry leaders in the US are AT&T Wireless (AWE) and Verizon (VZ). The number of cellular subscribers in 1997 was 42.8 Million and in 2000 that number went to 66.4 Million. That works out to a 55% growth in usage. Over time it took 15 years to get to 42.8 Million subscribers, but it took only 3 years to gain 23.6 Million subscribers for a total of 66.4 Million. The industry has seen major growth over the past 4 years. Some reasons for this change are the changes in cellular technology for the past 20 years Analog signals have been in use but in the past 5 years Digital technology has been introduced. Currently both cellular systems are in use but new subscribers are leaning towards the Digital signal systems and phones, due to the clarity in connection, advanced features, and expanded service. As well as older customers are switching over to the new digital system and phones.
Some of the issues that exist within the industry. With the change in cellular systems and the proliferation of new cellular providers the customer is receiving many benefits such as falling prices from the diverse competitive market. The cost for cellular plans are constantly falling but at the same time the amount of Minutes offered by the plan is increasing. Recently an advertisement offered 3000 minutes for $35.00 per month, no long distance, and the cellular phone handset was free. The cost of such a plan works out to about $0.01 per minute. So as technology advances and prices continue to fall the consumer uses the cellular phone to make all calls both local and long distance, subsequently the long distance carriers are losing market share as consumers change their usage habits. At the same time the manufacturers of cellular handsets such as Ericsson and Motorola are forced to produce more products, and new products for less money. As an example the Motorola StarTac sold for $250 6 months ago, now that same product sells for $70, that is a 72% reduction in price over 6 months.
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"Instability in the Telecommunications Industry." 123HelpMe.com. 16 Jul 2018
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