Telecom Upheavals

WSJ writes that it is a free-for-all in the marketplace:

Over the past four years, the nation’s largest phone companies have lost local phone lines by the millions as consumers fled to cellphones and e-mail. Many customers are giving up their second, and even their primary, phone lines. The intrusion by cable companies only made things worse, forcing the Bells to expand into other areas that promise more growth, such as wireless, high-speed Internet and television.

For their part, cable companies are feeling the pinch as satellite-TV providers sign up more customers, increasingly with help from the Bells. SBC, for example, has invested $500 million in EchoStar as part of its joint marketing deal.

On the other hand, technological advances are making it easier for telecom and cable companies to break into each other’s businesses without making huge upfront investments. The development and spread of broadband Internet service lets cable companies offer phone service over the Net, which is much cheaper than running it over their cable lines. And phone companies are investing in new services, such as downloadable movies on demand, that run on broadband and that will, they hope, provide new revenue streams.

The nation’s three largest phone companies are also each developing new fiber networks that will allow them to offer data-transmission speeds that are far higher than those offered by digital subscriber line or cable broadband today. Such networks, which are costly to build and will take years to complete, would allow the companies to offer hundreds of TV channels as well as other services such as online gaming, phone and Internet access.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.