Telecommunications Industry Profile

Broadly telecom industry can be divided into two sectors, Equipment Sector and Services Sector. Equipment sector players manufacture telecom products whereas the services sector comprises operators and other service providers. The telecommunications industry equipment sector is comprised of companies that manufacture products that are used by both end-users and input to other telecommunications companies. Customers use these products to access telecommunications services. In this article, we will discuss the industry profile of telecommunications.

Sectors in the Telecom Industry:

1. Telecommunications Equipment Sector:

The telecommunications industry equipment sector is comprised of companies that manufacture products that are used by both end-users and input to other telecommunications companies. Customers use these products to access telecommunications services. Other telecommunications companies use these products to create and maintain infrastructure and deliver services.

The equipment sector provides satellite and broadcast network equipment, wireless telecommunications equipment, wireline telecommunications equipment, and other telecommunications and computer networking equipment.

2. Telecommunications Services Sector:

This sector constitutes of players in the telecommunications industry that provide various services to end customers like telecom service providers, broadband service providers, and intermediaries.

The telecommunications services sector can be divided into the following categories:

(A) Wired Services:

The wired services subsector offers direct communication services, including fixed telephone (local and long-distance), broadband, and cable network services. This subsector also builds and maintains the needed fixed-line infrastructure, including landlines, microwaves, and satellite link-ups. This subsector also includes companies that offer non-voice communication products, such as telegraph.

The largest sector of the telecommunications industry continues to be made up of wired telecommunications carriers. Establishments in this sector mainly provide telecommunications services via wires and cables that connect customers’ premises to central offices maintained by telecommunications companies. The central offices contain switching equipment that routes content to its final destination or to another switching center that determines the most efficient route for the content to take. These companies also maintain the cable network that connects different regions of the country as well as foreign countries and forms the backbone of the industry. While voice used to be the main type of data transmitted over the wires, wired telecommunications service now includes the transmission of all types of graphic, video, and electronic data mainly over the Internet.

(B) Wireless Services:

The wireless services subsector offers services such as cellular mobile phone, paging, satellite, broadband communication, and wireless public safety services. This subsector operates and maintains the switching and transmission facilities to provide these services. Companies in this sector may also supply and maintain the equipment used to receive signals. Wireless telecommunications carriers, many of which are subsidiaries of the wired carriers, transmit voice, graphics, data, and Internet access through the transmission of signals over networks of radio towers. The signal is transmitted through an antenna into the wireline network. Increasing numbers of consumers are choosing to replace their home landline phones with wireless phones. Other wireless services include beeper and paging services.

(C) Internet Services:

The Internet services subsector offers wired, wireless, and broadband Internet services, which are provided by telecommunications companies and Internet service providers, also known as ISPs. Some ISPs also provide extra services, like web hosting or web page designing. Players in this subsector may build and maintain their own infrastructure and networks or they may share the infrastructure of other providers.

(D) Resellers:

Resellers of telecommunications services are another sector of the telecommunications industry. These resellers lease transmission facilities, such as telephone lines or space on a satellite, from existing telecommunications networks, and then resell the service to other customers. Other sectors in the industry include message communications services such as e-mail and facsimile services, satellite telecommunications, and operators of other communication services ranging from radar stations to radio networks used by taxicab companies.

(E) Cable and Program Distribution:

Cable and other program distribution is another sector of the telecommunications industry. Establishments in this sector provide television and other services on a subscription or fee basis. These establishments do not include cable networks. Distributors of pay television services transmit programming through two basic types of systems. Cable systems transmit programs over fiber optic and coaxial cables. Direct broadcasting satellite (DBS) operators constitute a growing segment of the pay-television industry. DBS operators transmit programming from orbiting satellites to customers’ receivers. Establishments in the cable and other program distribution industry generate revenue through subscriptions, providing Internet access, providing phone service, and advertising sales. They also charge fees for pay-per-view or video-on-demand programs.

(F) Other Broadband Services:

The other broadband services subsector offers other wired or wireline broadband services and applications that are not covered by the other three subsectors. These include services such as Internet Protocol television (IPTV), Voice over Internet Protocol (VoIP), and Internet Protocol virtual private network (IP VPN or VPN).