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Your instincts are correct.
In 2002, the U.S. telecommunications
industry’s gross revenues were $385 billion
(including cable and satellite TV), and its
net revenues (after interconnection costs,
program content and handset subsidies)
were $315 billion.
By 2013, wireline gross and net revenue
both had fallen by more than 50 percent
compared to 2002. The most-notable de-
clines in the business segment. Total gross
sales in the business segment were 15 per-
cent smaller in 2013 than they were in 2002.
That might not seem like such a big deal.
It is.
In the business segment, sales of fixed
network products literally have fallen
by about half. Virtually all the revenue
growth has occurred in the mobile or ca-
ble TV segments of the business market.
So, as always, it matters “where” in-
creases and decreases have occurred. Not
all services, networks providers and distri-
bution partners have benefitted equally.
If you were in the fixed network busi-
ness services market before 1996, you
understand all too well what the changes
have wrought. Those who have not been
in the business too long might miss the
magnitude of the changes.
Optimistically, the market has shrunk
by 15 percent. But if one is not directly em-
bedded into the mobility part of the mar-
ket, then “the market” is smaller by half.
Though one might rightly guess that
data services have spurred some growth,
it is mobility services that have driven the
fundamental changes. Hence the impor-
tance of asking how, and if, various con-
testants have a role in mobility.
Small business spending on mobile
services exceeded spending on fixed-
network voice for the first time in 2012,
according to In-Stat. Mobile services
eventually will become the single-largest
category of small business spending, big-
ger than broadband access or fixed-line
voice, In-Stat has argued.
In 2002, businesses spent about 12
percent of communication budgets on
mobility services. By 2013, businesses
were spending nearly as much on mobility
as they were spending on fixed services.
That should, and likely does, affect buy-
ing and distribution preferences, since buy-
ing of mobility services can be done directly
and centrally by enterprises, and using stan-
dard retail channels in the case of smaller
businesses. There is, in other words, less
need for distributors and channel partners in
the sourcing of mobility services.
There are direct analogies in the ap-
plication area. A substantial amount of
voice traffic was replaced first by email
and then by messaging. The implica-
tions for fixed network revenue earned
by service providers and their partners is
clear enough.
Source: Excelacom
Source: Insight Res arch
Global Wireline and Wireless Revenues,
2014-2019 ($Billions)
$3,000
$2,500
$2,000
$1,500
$1,000
$50
$0
14 2015 2016 2017 2018 2019
Wireline
Wireless
$Billions
Source: Analysys Mason
Emerging Asia Fixed and Mobile Revenue
350
300
250
200
150
100
2008
2009
2010
2011
2012
2013
2014
2015
2016
50
0
Retail revenue (USD billion)
Busin ss network servi s
Fixed braodband
Fixed voice
Handset data
Mobile broadband
Mobile messaging
Mobile voice
Source: Deloitte University Press; company reports
2002 and 2013 U.S. Telecommunications and Content Distribution
Revenues, $ Billions
2002 2013
Consumer
2002 2013
Consumer net
2002 2013
Business
2002 2013
Business net
350
300
250
200
150
100
50
0
Cable and other
DBS
Wireless
Wireless
222
316
185
226
163
139 130
107
S
Sourc
Enter
250000
200000
150000
100000
50000
0
Sour
Pe
in
Percent
Security Technologies
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January - February 2016
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