Four Vertical Industries Spend Most on Telecommunications in 2003

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BOONTON, NJ. December 15, 2003:

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Four vertical industries will account for more than 50 percent of all corporate spending on telecommunications services in 2003, says a new market research report from Insight Research.  By the close of 2003, US businesses will have spent nearly $161 billion on wireline telecommunication services, and by 2008 business spending is forecasted to grow to $234 billion, according to the new research study. 
 

Insight’s newly-released market analysis report, Telecom Services in Vertical Markets 2003-2008, reveals that four industries—wholesale trade; financial, insurance, and real estate; professional business services; and communications—will account for 68.5 percent of the corporate telecommunications expenditures by the end of 2003.  The study analyzed 14 vertical industries categorized by the Standard Industrial Classification (SIC) system, and focuses on corporate spending for wireline voice and data telecommunications services in each industry.
 

“While the general economy is picking up some steam, the telecommunications industry remains in the doldrums because its basic products are perceived to be commodities that should be purchased strictly on price, says Robert Rosenberg, president of Insight.   “The only way to break free of the continuing price wars is to move away from a generic ‘one-size-fits-all’ service offer, and begin defining vertical marketing strategies.   Vertical marketing allows telecom service providers to competitively differentiate their services with industry-specific solutions, get their costs in line by focusing on niche opportunities, and squeeze revenue from those business sectors with historically high telecom expenditures,” Rosenberg concludes.
 

Insight’s study reports that 87 percent of the carriers’ business wireline service revenue is still attributable to voice, a commodity service that allows little differentiation.  When telecom providers focus on vertical market solutions, however, they move away from the commodity voice sale and toward higher-margin, value-added services, the report says.  The vertical approach to marketing strengthens customer loyalty by developing closer links to the customer’s core businesses.
 

A free report excerpt, table of contents, and ordering information is available online at www.insight-corp.com/reports/vert03.asp.  This 101-page report is available immediately for $3,995 (hard copy).  Adobe Acrobat (PDF) report licenses are also available; visit the Insight Web page, or call 973-541-9600 for details.

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Marketing Dept.