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Sep
10
2010
Telecom Industry Outlook: Proliferation and Innovation Chilton Tippin

While the world economy lurches through an economic recovery that economists are now saying will take longer than predicted, the telecom industry is forecasted to be a flotation device, one of the major industries driving economic resurgence.

According to an analysis by TMC Net, overall dynamics seem to be shifting in favor of telecom, primarily due to it being needed both in developed and underdeveloped nations.

Another reason the telecom industry is predicted to be a boon is because of its sheer size.

“The telecommunications industry encompasses a lot of technology-related businesses. Besides the legacy local and long-distance wireline phone services, telecommunications also include wireless communications, Internet services, fiber optics networks, cable TV networks and commercial satellite communications,” reads the TMC Analysis.

The telecom industry remains buoyant for two reasons: a generally improving overall global economy, and the speed with which technological inventions are churned out, making even saturated markets profitable.

A clear example of the machinery allowing the telecom industry such flexibility amid hard times can be viewed in China. Since increased connectivity is an investment toward prosperity in the future, China devoted $586 million in government pump spending to telecommunications infrastructure. In doing so, China has grown its mobile supplier base to nearly 800 million—the majority of these subscribers coming during the recession.  On the other end, the US, which is nearly 90 percent saturated, remains a profitable market because of the continuous network product upgrades and invention by the industry players.

And the developing world isn’t far behind. China began to deploy its own 3G network this year, opening up a market opportunity of more than $10 billion for several telecom companies, from wireless providers to equipment suppliers.

As the world becomes more connected, the market becomes more saturated; therefore, the revenue stream of garnering new subscribers begins to dry up. However, the perpetual cycle of progress, spurred on my competition and inventiveness foretells a continuously robust future for telecom.

Soon, companies will be putting forth 4G networks, data downloading will completely supplant voice calls for revenue generation, and smartphones will become more ubiquitous than the already old-fashioned feature phone.

What’s next? Who Knows? The only thing that appears certain is telecoms continued prevalence.

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