26 October 2005

Wireless substitution for wireline service revisited

I blogged about this topic earlier; now comes this article, which reports that 9.4% of wireless subscribers have made wireless their primary phone. The study expects this number to grow to as high as 37% by 2009.

What impact does this have on the (incumbent) wireline carriers? What would your stragegy recommendation going forward be if you worked for such a carrier (as you someday may do)? To help you think this through, it woudl be valueable to consider what your assets are and how you might leverage them in novel ways.

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KuangChiu Huang said...

I opine two solutions:
1. Investing in wireless service (e.g., Verizon/Verizon wireless and SBC & Bell South /Cingular). LECs can obtain new source of revenues from mobile phone services to recover the shrunk revenues in fixed telephone service.
2. It seems the trend of substitution is inevitable, LEC could upgrade their telephone network to FTTH and offer bundle services (telephone, broadband Internet access, TV programs, and wireless) with preferential rates. Besides, LECs do not worry about opening their upgraded network for competitors, because the FCC has eliminated “Mandated Sharing Requirement” on Incumbents' wireline broadband Internet access services. Verizon’s FiOS could be the similar solution after the new regulation of “Mandated Sharing Requirement”.

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