First Research US Industry Profile

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Telecommunications Services
SIC Codes: 4812, 4813, 4841, 4899
NAICS Codes: 517
Last Quarterly Update: 4/25/2022
Companies in this industry operate or provide access to facilities for voice, data, text, sound, and video transmission through wired, wireless, or satellite networks. Major companies include US-based AT&T, Comcast, and Verizon, as well as China Mobile (China), Deutsche Telekom (Germany), NTT (Japan), Telefónica (Spain), and Vodafone (UK).
Worldwide, the telecommunications industry generates $1.7 trillion in revenue and is forecasted to experience growth by over 5% until 2028, according to Grand View Research. China and The European Union lead the world in value of the leading office and telecom equipment importers worldwide, according to Statista.
The US telecommunications services industry includes about 60,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $620 billion.
Competitive Landscape
Telecommunications services providers operate in a highly competitive market that includes wireless companies, traditional telephone companies, cable companies, internet service providers, and software and application providers. Market saturation has led to a slowdown in wireless subscriber growth in certain developed regions, driving major carriers to lower their prices to compete. Because voice services may increasingly be considered a commodity, providers may attempt to compete by offering superior customer service or heavily investing in marketing.
The telecommunications industry in the US is highly concentrated: the 50 largest companies generate about 90% of revenue. Carriers around the world are in a consolidation push, seeking to grow their subscriber bases through acquisitions, improved service, and new features. Competitive moves may include offering lower pricing; unlimited text, talk, and data plans; and faster network speeds. Companies that can invest in network upgrades and digital advances will have the competitive advantage. A network that can consistently provide high-quality and reliable service is a key market differentiator.
Competitive Advantages:
Superior Customer Service - Because voice services may increasingly be considered a commodity, providers may attempt to compete by offering superior customer service.
Access to Capital - Companies in all segments of the telecommunication industry need to periodically invest in equipment, especially to maintain and upgrade networks.
Companies to Watch:
AT&T offers services via wireless, wireline, satellite, Wi-Fi, IP network, Virtual Private Network, and fiber optic cable. The company is the biggest wireline voice provider and the second biggest wireless provider (behind Verizon Communications) in the US.
Verizon is the #1 wireless phone service in the US (ahead of AT&T) and the #2 US telecom services provider overall (after AT&T). The company has increased its size significantly through the acquisitions of AOL and Yahoo.
China Mobile is the world's leading wireless operator by subscribers. In addition to mobile voice and data services in China, it offers international roaming access through agreements with network operators worldwide.
Nippon Telegraph & Telecom (NTT) provides long-distance, international, and data networking services in Japan. The company owns a controlling stake in Japan's dominant cellular carrier, NTT DoCoMo. NTT also has holdings in Europe, the Pacific Rim, and the US.
Products, Operations & Technology
Major sources of revenue are wireless voice telephone services (more than 30% of industry revenue), followed by internet access services (about 20%), wireless ... plus:
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