Wednesday, May 10, 2006

Telcos Digging Huge Hole

Continuing on his Keynote address at the VPF show in Miami last month, Gary Kim (editor of VoIP Business News) states that " U.S. local exchange carriers are digging a huge hole. And without major innovation, that hole could be a grave. U.S. telcos will see their wireline revenues drop by about $21 billion between 2004 and 2009, according to researchers at In-Stat. And that’s the good news. According to Technology Futures, U.S. wireline connections (narrowband and broadband) will drop from about 180 million to about 100 million by about 2012. That’s a loss of about 80 million access lines, or more than 40 percent of lines now in service." But the truly startling factoid is this: "In fact, in a couple of U.S. communities, such as Omaha, Neb. or Orange County, Calif., the incumbent telco arguably is only the second largest provider of voice services, with the local cable company being the leading provider." In Omaha, Qwest doesn't need to share any more, since the FCC released them from ILEC status there. Imagine if that starts happeneing every where? It truly would be just cable and telco. "What devastates the ILECs cannot help but ravage every other player in the same market space, to some extent." Hence, why the FCC is shoring up the PSTN via supporting RBOCs.

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