Communications Industry

The global communications industry has witnessed tremendous changes in the past few years. One of the most important changes is the unshackling of the communications industry worldwide, particularly in the developing countries. In the past few years, a growing number of developing countries have allowed private players in the fixed-line and mobile cellular segment, so the telecom industry is changing.

The entry of private players into the communications industry has hastened the growth of mobile cellular services. Statistics of the International Telecommunication Union show that the number of mobile cellular subscribers overtook the number of fixed-line subscribers in 2002.

In 2003 communications industry statistics show the number of mobile cellular subscribers stood at 1,329m, while the number of fixed-line subscribers totalled 1,210m. Anecdotal evidence suggests that the shift in the communications industry away from fixed-line services toward mobile cellular services has accelerated in the past few years.

Yet revenues from mobile cellular services lag behind those of fixed-line services in the communications industry. In 2003, the revenues of mobile cellular segment stood at US$414 billion as against fixed-line segment’s revenues of US$455 billion.

Trends in the communications industry

A major trend in the communications industry is the growing convergence between communication, information and entertainment in fixed-line and mobile segments. In the fixed-line segment, for instance, asymmetric digital subscriber line technology is facilitating high-speed data transmission over copper wires.

Now convergence between information and communication is increasing on the mobile networks. Most mobile operators provide:

• Information services such as news alerts and business news.
• Entertainment. Now most mobile operators provide a selection of games for different mobile phone models. Music downloads have also become popular.

New technologies such as the Internet Protocol-based broadband infrastructure are hastening the convergence between information, communication and entertainment in the communications industry. The number of personal computers, for instance, increased from 130m in 1991 to 650m in 2003 while the number of Internet users shot up from 4.4m in 1991 to 665m in 2003.

Development in the communications industry has led to Voice over Internet Protocol (VoIP) allowing consumers to make calls over the Internet. Skype technologies, for instance, provides software, which allows two Internet users to talk to each other free of cost. The VoIP technology has such far-reaching implications for the communications industry, that already traditional operators such as AT&T have moved swiftly to offer VoIP-based services to consumers. Skype, meanwhile, is about to be acquired by ebay. There are an increasing number of call centres adopting VoIP technology to cut costs too.

The IP-based broadband infrastructure is also increasing convergence between communication and entertainment in the communications industry. Telstra, for instance, announced plans of providing content such as movies and sports programming through its IP-based broadband network.

The communications industry, on account of its fixed-line and mobile networks, is well-placed to exploit the convergence of information, communication and entertainment. The desire to control content may encourage communication providers to make a play for information and entertainment companies in the near future.