RealTime IT News

State of the (Comm)Union

The bad days seem to be over for U.S. telecom companies, although the boom times are gone, never to return. Research and Markets, a Dublin, Ireland-based research firm, reported that most operators have gotten down to business, focusing on increasing their customer bases while becoming profitable.

"It is believed it will not be until 2005/6 before the market returns to usual levels," the report said. "And when it does, it will be valued in a similar manner to any other mature national market -- not at the ridiculous levels witnessed in the telecommunications and dot.com boom."

The firm said that consolidation in the wireless market, following the acquisition of AT&T Wireless by Cingular after a brief bidding war with Europe's Vodafone, will continue as long as a number of strong operators remain. In the meantime, congested networks and spectrum in urban areas will provide enough customers for the current number of wireless services.

While wireless carriers have for the most part upgraded their networks to General Packet Radio Service or CDMA2000 1xRTT -- and are now rolling out EV-DO and EDGE or WCDMA services across the country -- they don't face the same government mandates to build third-generation networks that European operators must deal with. This has allowed them to spend their bucks on customer acquisition and increasing average revenue per user.

SMS and other mobile messaging services began to make an impact on mobile operators' bottom lines, with usage of these services amongst the youth segment beginning to mirror usage levels seen in Europe.

Research and Markets said businesses are accepting voice over IP , thanks in part to support by mainstream U.S. operators like AT&T. By 2006, the report said, IP telephony will be one of the major factors driving the growth in broadband services.

Demand for Internet access and data services continues to be strong. Research and markets said the total population of Internet users passed 207 million and now mirrors the general population in terms of demographics. However, the promised fast and furious growth or broadband services never materialized.

"What is being witnessed instead is the organic growth of a market -- but it is now beginning to reach the penetration rates that were initially forecast," the report said.

DSL and cable modem Internet services continue to dominate the broadband access market, with fixed wireless and satellite services relegated to niche markets where fixed-line solutions are not available. Competition continues to drive down prices, although more slowly than in previous years.