Telecommunication Services Industry Profile

The US telecommunications services industry includes about 11,000 companies with combined annual revenue of about $520 billion. Large companies include AT&T, Verizon Communications, and Comcast. The industry is highly concentrated: the 50 largest companies generate about 90 percent of revenue.

Wireline and wireless carriers, which are included in the industry, are further discussed in separate industry profiles. The industry also includes cable TV system operators. Cable TV networks are covered in a separate industry profile.

COMPETITIVE LANDSCAPE

Demand is driven by technological innovation and by growth in business activity and consumer spending. The profitability of individual companies depends on efficient operations and good marketing. Large companies have big economies of scale in providing a highly automated service to large numbers of customers, and have the financial resources required to build and maintain large networks. Smaller companies can compete effectively in small markets or by providing specialty services. Due to a large degree of automation, average revenue per employee is a high at about $500,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major services are wireline voice and data transmission (including cable TV), which accounts for about 50 percent of industry revenue, and wireless voice and data transmission, which accounts for about 40 percent. Other services include satellite telecommunications.

The operations of telecom service providers revolve around building, maintaining, and operating networks to reach customers. Networks can be built by physically laying wires, building transmission towers, and interconnecting switching centers. Networks can also ...