Dear Expert Eye,
What are your feelings on the overall viability of the telecom industry, considering the drastic cuts in spending that services such as VoIP represent? What do you recommend agents do to mitigate the risks of lost business? Predictions? Recommendations?
–Geoff Shepstone, Telecom Brokerage Inc
The $300 billion telecommunications industry continues to be disengaged from the broader economic recovery. Major telecommunications suppliers continue to report poor revenue and earnings, in many cases seeing financial performance plunge much deeper than was expected by company executives, by shareholders and by the investment community.
Look for 2004 to be another brutal year financially in telecommunications as opposed to an industry recovery. Why? Carriers commodity pricing is likely to continue through 2004 and into 2005 as telecoms issue new directives to match — or beat — price discounts offered by competitors in an effort to gain market share and own the end-user contract. As well, it is the consensus of opinion by leading corporate telecommunication industry CEOs that there will be further corporate mergers, organizational restructuring, lay offs, overcapacity and slack demand. And lets not overlook AT&Ts recent stock slide, and Standard & Poors saying the companys BBB long-term credit rating could be cut to junk level, which only adds to this near-term industry prediction.
Further punctuating the present state of the telecommunications industry is change to new technologies you mentioned, Geoff.
Adding to these industry trends is the growing customer satisfaction with wireless telecommunication services with its new service applications, combined with follow me wireless telephone number portability. For example, Verizon Wireless announced plans to invest $1 billion during 2004 and 2005 to deploy a high-speed wireless Internet data network nationwide. It is anticipated that this move will force other wireless carriers to increase their capital spending and speed up plans to roll out similar features. These wireless carriers include telecommunication suppliers of legacy telephone service. The Verizon investment signals that telecom companies are moving to invest in growth areas, even as their core businesses, such as phone lines, continue to decline amid increasing price competition.
Further illustration of the telecommunications industry shift away from legacy telephony is the continued depressed and shifting capital investment.
It is not likely that the telecommunications industry will rejoin other business segments in the broader U.S. economic recovery within the foreseeable future. So what do alternate channel master agents and others do to participate more fully in the telecommunications shift?
Now is as good a time as ever, Geoff, to step back, examine your current business and financial model and strategy, and consider new business and enterprise strategies. You will not only find the exercise to be challenging and stimulating, you may find new ways to restructure and grow your business, and remain highly competitive.
Hedley Lawson Jr.
managing partner, Aligned Growth Partners
Hedley Lawson brings more than 25 years of experience as a senior executive, officer and business leader to his role as the managing partner of Aligned Growth Partners. He has worked with domestic and global boards of directors, executive committees and management teams to build and sustain business, human capital, organizational performance and organization change strategies for entities ranging from startups and pre-IPO companies to corporations with more than a half-billion dollars in sales and more than 4,000 employees.Lawson has held positions of senior vice president and vice president, providing human capital, quality management and technical services leadership in high technology, software development, telecommunications, medical device technology, financial services and manufacturing businesses. His experience includes SOLA International Inc.; SOLA Optical USA; Fair, Isaac and Co. Inc.; and QuantumShift Communications Inc.
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October 16 2019 @ 18:12:06 UTC