Top Telecom Industry Highlights for 2005

As was the case in the first few years of the 21st century, the telecommunications industry continued its blistering pace of growth and change in the year 2005.

As the year comes to a close, it is nice to take a nostalgiac look back at some of the top telecom stories of 2005. Not only to see where we have been in the last 12 months, but also to anticipate how these changes and developments will affect the telecom industry for 2006 and beyond.

Telecom Merger Mania

Major telecom carriers continue to jockey for position for a piece of the trillion dollar pie with 2005 spawning mega-mergers of gargantuan proportions.

SBC got the ball rolling in January with its 16 billion dollar acquisition of AT&T Corporation. Seems ironic now that a Baby Bell would swallow up what used to be (pre-1984) the company that monopolized the entire industry. The advantage is that SBC now has access to ATT's massive network without having to negotiate.

Push-to-talk communication went mainstream in 2005 when Sprint Corporation acquired Nextel for a mere 36 billion dollars. The addition of another 15 million customers now puts Sprint as a contender in the fight for the wireless dollar.

And finally, Verizon's takeover of MCI has just been approved and should be finalized sometime in early 2006. All this merger mania makes you wonder if bigger really is better.

VoIP Explodes

As was expected, the acceptance and popularity of Voice Over IP telephony exploded in 2005. With no end in sight, research now predicts VoIP will account for at least 74% of corporate telephony lines by the end of the decade. Moving to VoIP network services is no longer becomes a question of "if" but one of "when". If you are considering migrating to VoIP, consider a VoIP readiness assessment.

China Telecom Emerges

China is now considered the biggest telecommunications market on earth. And who better to serve China's 1.3 billion population base than its state-run China Telecom. Even with recent deregulation and openings for competitors, China Telecom still boasts 68.1 percent of the country's telephone subscribers and 54 percent of the market share in IP services.

In 2005, China Telecom made inroads into what should be one of the hot topics for 2006 - IPTV, or Internet Protocol Television. Made possible by the growing popularity of broadband Internet connections, IPTV enables people to access TV programs through their computers or other Internet terminals.

Bernie Ebbers Goes to Jail

2005 turned out to be the final chapter for some of the most powerful figures of the 1990's telecom boom. In a year that saw federal prosecutors step up their battle against corporate crime, former WorldCom chief executive Bernard Ebbers was sentenced to 25 years in prison for his role in the accounting fraud at the telecom giant.

Wi-Fi Hotspots a Big Hit

Wi-Fi is a network that provides wireless connections to the Internet, so that people can use their laptops or mobile Web phones almost anywhere.

The continued expansion and popularity of Wi-FI "hotspots" in 2005 made the local coffee shop the workplace of choice for millions of laptop-toting workers. Now entire cities are getting into the act and offering free Wi-Fi access to anyone who wants it (much to the dismay of telecom carriers). Watch out for Wi-Max and the recently talked about X-Max to take overshadow Wi-Fi over the next few years.

Skype Becomes Part of Ebay

The purchase of VoIP provider Skype for 2.6 billion dollars by auction giant Ebay could be one of the strangest (or smartest?) telecom developments of 2005. Skype's software lets PC users talk to each other for free and make cut-price calls to mobiles and landlines. 2006 should shed some light on just how Ebay will incorporate this deal into a profitable venture.

Telecom Predictions for 2006?

2006 should make for some interesting developments in the telecommunications industry. Without going to far on a limb, consider these headlines as possible scenarios for 2006:

Google Poised to Become Largest VoIP Provider on Earth by 2010

Quest Executives Get Long Prison Terms for Insider Trading

Widespread Cellular Phone Virus Wreaks Havoc Worldwide

Global VoIP Subscriber Base Triples in 2006

IPTV A Disappointment for Most Consumers

That's it for this month. If you have questions regarding a specific telecom cost-reduction strategy or telecom bill management need, please don't hesitate to contact us today or call us toll-free at 1-888-383-3200, Ext. 110.

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