6 developments that will shape 2004: telecom may be recovering, but winning markets in 2004 is still a brutal business

America's Network, Jan 15, 2004

Battling back from three years of financing and revenue trauma, the nation's leading telecom service providers are preparing for a different brand of battle in 2004. The competitive environment will be fierce and unforgiving. Service providers will be relying on new weapsons to win markets, and looking for the right alliances and acquisitions to beat back newfound rivals.

Our report highlights six of the biggest trends for 2004. As the industry finds its footing, carriers will aim to expand their core platform offerings. Suddenly, RBOC vs. RBOC is in sight. Cablecos will pressure telcos to keep pace in high-speed, with new rounds of price and service-based warfare. The broadband game also changes as applications become more relevant.

POTS is also under increasing threat. The challenge for VoIP and wireless providers is to prove their legitmacy as successors.

Wireless carriers finally graduate to the data academy, armed with bigger revenue numbers. Carriers have spent billions to get their data networks in place. 2004 becomes the year to show them off. Devices will play a big part in driving carrier differentiation.

Enterprises will also start spending again and horizonal mergers will lead to unlikely pairings.

The choatic environment of telecom creates both peril and opportunity. Market execution and leadership remain decisive factors. The abyss that swallowed multiple players in the downturn does not disappear. It remains a reminder of the risks at hand. Telecom's winners' circle may remain small, but by the end of 2004 it will become easy to identify who belongs.