Telecommunications Services Industry Profile

The US telecommunications services industry includes about 11,000 companies with combined annual revenue of about $500 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.

The global telecommunications industry generates around $2 trillion in revenue annually from services and equipment, according to Gartner. The European Union, US, Kuwait, and Canada lead the world in exports of telecommunications services, according to the World Trade Organization. Top global companies include Japan's Nippon Telegraph and Telephone Corporation, Gremany's Deutsche Telekom, and Spanish firm Telefónica.

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. The industry is capital-intensive: average revenue per employee is about $550,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major services are wireline voice services (35 percent of industry revenue); wireless services (36 percent); and cable distribution (23 percent). ...