Business Spending on Telecommunications Services Hits $132 Billion, Says Insight Research

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BOONTON, NJ. March 9, 2005:

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Four vertical industries accounted for more than 60 percent of all corporate spending on telecommunications services in 2004, says a new market research report from Insight Research.  By the close of 2004, US businesses spent just over $132 billion on wireline telecommunication services, and by 2008 business spending is forecasted to grow to more than $144 billion, according to the new research study. 

 Insight’s newly-released market analysis report, “Telecom Services in Vertical Markets 2004-2009”, reveals that four industries—wholesale trade; financial, insurance, and real estate; professional business services; and communications—accounted for 69 percent of corporate telecommunications expenditures by the end of 2004.  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.

 “The mergers now reshaping the telecommunications industry signals an armistice in the recent price wars, but the fact remains that the big carriers’ basic products are perceived to be commodities that should be purchased strictly on price, says Robert Rosenberg, president of Insight.   “The only way to rise above of the next price war 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 68 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/vert04.asp.  This 99-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.

2005 Industry Review

Marketing Dept.

at Insight Research

973-541-9600