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Industry Analysis of Telecom Industry - Essay Example

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Industry Analysis of Telecom Industry

According to the US Wireless Communication Association, 3.6 million jobs are directly or indirectly dependent on the US wireless telecommunications industry.
Verizon Wireless owns and operates majority of US wireless network. It is a joint venture of Verizon Communications and Vodafone headquartered in NJ, Verizon. Verizon wireless deals in wireless voice and data services. Verizon has built the nation's first wide-area wireless broadband network and it also delivered the nation's first wireless consumer 3G-multimedia service. It has a broad consumer base. The company generated about US$ 75.11 billion in 2005 in net revenue, with revenue net per share of 27.155. The company quarterly growth is healthy and increased by 5.8 percent in 2005 as it increased its gross profit by 49.64 percent. The total cash flow was $22 billion; further detail can be seen in the table below.

Verizon business model focuses on creating value and driving earning and growth. It has proved itself by generating stable margin, solid returns and stable financial performance. The company has extensive connections in the business and government sector and relies on them to generate revenue. The company has targeted costs of $890 million in 2006 to install a fiber optic network, which will be capable of providing Verizon's advanced FiOS data and video services.

An AT &T Wirless service was the third largest wireless telephone carrier US. In October 2004, AT&T wireless completed its merger with Cingular to become the largest wireless carrier in the United States. Under the agreement, only the Cingular brand would survive. On November 16, 2004, every single AT&T Wireless store was re-christened under the Cingular banner. It is now renamed as AT&T Inc. The company is based in San Antonio, Texas and formed recently in 2005 by SBC Communications.

The company net revenue for year 2005 reached $43.86 billion, with revenue per share 13.023, while the quarterly growth in 2005 remained 26 percent. The company total gross profit reached $24.67 billion. The total operating cash remained at $12.66 billion; further detail can be seen in the table below.




Source: Yahoo Finance

Business Model

In 1907, AT&T president Theodore Vail did not keep it a secret, but made it goal to attain the status of monopolist, which he named as "One Policy, One System, and Universal Service." At the time AT&T started to purchase competitors and retained its monopoly till 1970, but the rise of cheap microwave communications opened opportunity for other competitors. However its monopoly was broken and it was bought over by rivals Verizon, currently it is surviving through mergers.



III) T-Mobile
T-Mobile is group of mobile phone corporate subsidiaries (under the ownership of Deutsche Telekom), which operates major GMS networks in Europe and US. T-Mobile has about 109 million subscribers, which makes it the world's 3rd largest mobile phone service provider. T-mobile is present in eight European countries (Austria, Croatia, Czech Republic, Germany, Hungary, Great Britain, Netherlands, Slovakia) and USA.
T-Mobile USA is the fourth-largest wireless carrier in the U.S. market with 21.7 million customers. In 2004, T-Mobile was able to generate revenue of $9366 million and able to grow at the rate of 12 percent a year. Further detail can ...Show more

Summary

Telecom industry is the building block of any nation in today's world. As wireless communication is becoming more widespread than the traditional communication, it is growing at a very high rate. …
Author : djaskolski
Industry Analysis of Telecom Industry essay example
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