CHICAGO, March 30, 2010 /PRNewswire/ -- Today, Zacks Equity Research discusses the Telecommunication Industry, including AT&T (NYSE: T), CenturyLink Inc (NYSE: CTL), Quest Communication International (NYSE: Q) and Comcast Corp. (Nasdaq: CMCSA).
A synopsis of today's Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/50179/Telecom+Industry+Outlook+-+March+2011
The major thrust for the telecommunications sector is coming from within the industry due to continuous network and product upgrades and invention by the industry players. Telecommunications is one of the very few industries, which witnessed massive technological improvement even under recession.
Smartphones have become the next-generation choice and are increasingly taking over market share from the basic mobile handsets. Smartphones are generally characterized by very powerful operating systems capable of supporting a variety of services and applications that need very high-speed network infrastructures. Various industry sources estimate that smartphone shipments as a percentage of total mobile handset shipment are expected to increase from 20% in 2009 to more than 50% by 2012.
Fabulous demand for technically innovative products has been the silver lining for the telecommunication industry in an otherwise tough environment. These developments are also helping telecom equipment manufacturers, infrastructure solutions providers and mobile phone makers to consolidate their finances.
Less than a decade ago, the telecom operators in the U.S., Western Europe, and Japan were upgrading their existing networks to high-speed 3G technologies. At present, the world telecommunications industry is talking about the installation of next-generation super-fast 4G technologies. Several giant telecom operators globally are funding projects to deploy super-fast 4G networks of WiMAX and LTE (Long-Term Evolution).
As of now, 19 LTE networks are commercially operational throughout the world. Cable TV operators are also upgrading their networks with high-speed DOCSIS 3.0 architecture.
Competition and Consolidation
Massive technology invention and innovation have resulted in significant competitive atmosphere within the telecommunications industry. Product life-cycle and upgrade-cycle has been reduced drastically since several firms are coming out with new types of products and services within a short span of life. As a result, we are witnessing hectic merger and acquisition activities to consolidate the market share.
The telecom carriers are gradually entering the basic video market, capturing subscribers from cable operators. Satellite TV providers are also eating up the video subscribers of the cable operators. On the other side, cable operators are gradually offering triple play voice, video, and data services and taking away subscribers from the telecom carriers. On line Internet video streaming companies are also becoming major competitors to the existing players of the telecommunications industry.
The biggest of the merger and acquisition activity is AT&T's (NYSE: T) proposed buyout of T-Mobile U.S. If this deal gets regulatory approval, then it might become the largest acquisition in this industry in the post-recession period. CenturyLink Inc's (NYSE: CTL) proposed acquisition of Quest Communication International (NYSE: Q) already received the FCC approval, and other deals are in the works. Comcast Corp. (Nasdaq: CMCSA) recently acquired NBC Universal's 51% stake.
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