Industry Spending on Telecom:  A Vertical Trend

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BOONTON, NJ. January 29, 1997:

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Companies in high-growth industries are spending billions on communication services and equipment, but don't always choose a carrier based upon the lowest price, says a new report from Insight Research. In fact, those vendors who continue to sell a private network here, discounts on minutes of use there, will lose out on a much bigger opportunity: creating communications solutions.

According to Telecommunication Services in Vertical Markets, bundling communications products at a discount isn't enough to keep large corporate customers happy. Increasing mobility, corporate downsizing, and the importance of information sharing is transforming business culture in every industry. In order to stay competitive and lean, business customers need bundled communication solutions that solve real industry problems. Communications then becomes a competitive asset.

"Deregulation is making communication service a commodity," says Robert Rosenberg, Insight's president. "Competing carriers can offer lower and lower prices, so where's the value? Instead, show your customers you can solve their problems. Help them manufacture products faster by employing EDI systems, improving links between supplier and customer. Show them these solutions will directly impact their bottom line. Now there's a valuable partner--not merely a communications vendor."

The entertainment, healthcare, financial service, and professional business service industries lead the nation in terms of revenue growth, but their communication expenditure growth rates are predicted to be even higher. The entertainment and media industry's communications spending alone will grow 15.8 percent, compounded annually through 2001. A critical issue for the entertainment industry is the creation of systems and infrastructure for delivering and managing content in new digital formats, without neglecting their traditional business.

Business expenditures for local and long distance service will surpass $180 billion by 2001, plus add-on services and vertical industry solutions ensures telcos additional revenue, bigger margins, and increased customer loyalty.

Further analysis of communications opportunities in eleven industries is published in Telecommunication Services in Vertical Markets.

Telecom Services in Vertical Markets 2002-2007

Telecom Services in Vertical Markets 2001-2006

Telecom Services in Vertical Markets 2003-2008

Private Line Services 2003-2008

Donna Savino

at Insight Research

973-541-9600