The telecommunications industry is currently experiencing an inelastic demand as cell phones have become a necessity for most people. The advent of 5G mobile internet and a preference for video streaming has presented opportunities for increased revenue generation and partnerships. However, fraudulent activities, speed of technological change, and digital disruption are major threats to the telecom industry. Also, traditional telephone manufacturing companies are gradually being phased out of the consumer market.
There is an inelastic demand in the telecommunications industry which has enabled telecom companies to generate high profit margins. This inelastic demand allows telecom companies to "pay higher dividends compared to other sectors".
Cell phones, internet connections, and cable channels are now a "necessity for most people". As a result, there is very little volatility in the quarter-to-quarter earnings of telecom companies. In addition to high profit margins, telecom executives hardly experience difficulty in predicting their future cash flows; their earnings are usually guaranteed.
Also, consumers are continuously displaying an "insatiable appetite for mobile data". According to "Deloitte's 2018 Global Mobile Consumer Survey", 37% of the respondents surveyed mentioned that they have unlimited data plans. This is an increment from the 25% of respondents who used unlimited data plans in 2017.
Since 2008, the "telephone apparatus manufacturing industry" has experienced over 40% workforce reduction to less than 20,000 workers.
Also, manufacturers of "traditional mounted phones" are gradually being replaced by mobile phone manufacturers. The superior features and convenience provided by these mobile phones has led to a rapid decline in demand for traditional phones in the consumer market.
While the decrease in pay-TV viewership is an advantage for telecom companies, this sudden decline has also affected the telecom industry negatively. In the first quarter of 2019, American telecommunications, satellite, and cable companies lost about 1.4 million TV customers. This is the greatest decline ever recorded.
Also, the United States telecommunication sector experienced a major fall in foreign direct investment (FDI) "from US$6.21 billion in 2017-18 to US$2.67 billion in 2018-19".
The 5G mobile Internet has finally been introduced; also, government regulation in terms of "net neutrality,” is now less stringent than it was in the past. This presents an opportunity for telecom companies to claim a significant share of media revenues. Taking advantage of this opportunity will lead to revenue growth, higher profit margins, and increased dividends for investors.
There is also an opportunity for partnerships and consolidations, especially in the cable and content areas. Currently, numerous consumers "prefer video streaming services over cable subscriptions."
Deloitte's "Digital Media Trends" survey reveals that 55% of households in the United States "subscribe to paid video streaming services". Also, pay-TV penetration has fallen to 63% — a decline from 75% in the previous year.
This improved internet access presents a great opportunity for telecom companies to earn more revenue in providing fixed broadband services. In addition, the advent of 5G internet makes it possible for businesses in the telecommunications industry to invest in smart city technology.
Telecom providers can also generate significant revenue by investing in mPayments and mHealth. An increasing number of subscribers "have adopted health care–centric wearables"; this presents an opportunity for operators in the mHealth space to monetize services provided for this group of people.
Also, in terms of mPayments, mobile operators could serve as integrators for applications, devices, mobile payment methods, and customer identity management. This strategy has the potential to increase the mobile payments revenue of telecommunications providers by a minimum of "fourfold by 2022".
Fraudulent activities like phone hacking, H.323 Toll Fraud, and Session Initiation Protocol (SIP), are major threats to the telecommunications industry. Companies operating within this sector could lose billions of dollars from such occurrences. Cyber fraudsters keep developing new strategies to siphon funds from various organizations through "SIP toll fraud hacking" and "user authentication hacking".
In a recent PWC survey, 45% of telecom leaders expressed extreme concern over the "speed of technological change,". Thirty five percent of these respondents were worried about "new market entrants".
Another 45% of the telecom leaders surveyed expressed concern over the presence of cyber threats. If telecom companies are unable to maintain privacy for their consumers while they surf the web, it would be impossible for e-commerce to thrive.
Digital disruption is another threat which originates from rival web-based companies. Compared to telecom companies, these rivals have the potential to earn more value from customers. Disruptors may also provide a means for customers to "bypass telecom channels and communicate directly on the internet."
MaxxSouth Broadband - Competitive Analysis 1
A complete analysis of MaxxSouth Broadband versus Wide Open West, a top competitor, including descriptions, revenues, funding amounts, products/service offerings, available reviews, target audiences, and individual competitive perspectives is provided in rows 2-9, column C-D of the attached spreadsheet. Below, please find an overview of each provider.
"MaxxSouth Broadband is a full-service telecommunications company offering industry-leading residential and commercial video, high-speed internet, and voice services".
The company has a 3-star rating out of 5 on Glassdoor with a 73% chance of being recommended. A break down of the rating shows a 3-star rating on work-life balance, 5-star on company values, 4-star on employability, compensation and benefits, and senior management.
MaxxSouth operates its broadband networks in 65 communities covering 23 counties within Mississippi and Alabama.
Cable internet is available to an estimated 260,000 people and is ranked as the 33rd largest residential cable provider in the United States by coverage area.
WIDE OPEN WEST (WOW)
Wide Open West "delivers an employee and customer experience that lives up to [its] name in all dealings, no matter how great or small." WOW is listed as one of the top competitors of MaxxSouth Broadband by Zoominfo.
The company has a general rating of 3.6 out of 5.0 according to Craft.co. A further break down of this rating is given as, culture and values 3.7, work-life balance 3.6, senior management 3.3, salary and benefits 3.5, and career opportunities 3.3.
Wide Open West serves about 300 communities in the states of Alabama, Florida, Georgia, Illinois, Indiana, Maryland, Michigan, Ohio, South Carolina, and Tennessee.
With the provision of personalized, community-oriented approach, the company boasts as a long-standing winner for best customer service in the industry and also offers a unique choice in Internet, TV and phone services.
To answer this request, we conducted a thorough search of the company website to find out details about their description, revenue, funding, products/service offerings, available reviews, target audiences, and competitive advantage. Our search was fruitful as we found the information precompiled. To determine a competitor of MaxxSouth Broadband, we consulted a reliable business directory, Zoominfo, where we found a list of the competitors of the subject company. We further studied the companies listed to ensure they met proper competitive criteria such as product and services rendered. Based on this metric, we were able to single out Wide Open West as a major competitor of MaxxSouth Broadband.
MaxxSouth Broadband - Competitive Analysis 2
The competitive analysis of two competitors to MaxxSouth Broadband, ImOn Communications LLC., and D & P Communications Inc., has been completed in columns E and F, rows 1-10 of the attached spreadsheet. Like MaxxSouth Broadband, ImOn Communications LLC., and D & P Communications Inc., focus on providing internet, phone, and TV products to residents and businesses in the US.
ImOn Communication, founded in 2007, is a provider of high-speed internet, data, cable TV, and phone service to businesses and residents in the communities of the Cedar Rapids, Marion, and Hiawatha.
ImOn Communication claims that "it is 100% local to better serve its customers; supports its community through volunteering, sponsorship, and donations; prides itself on providing outstanding support to its customers, and leads with technology by continually investing in its infrastructure to stay ahead of the growing demands of its customers."
"D & P Communications has been in business for over 100 years," having been founded in 1898. It has 5 offices in Petersburg, Blissfield, Tecumseh, Dundee, and Adrian. "D & P Communications is a local and highly trusted phone, cable, and Internet provider serving Southeast Michigan."
D & P claims that it "offers affordable, feature-rich phone services, HD cable television, and high-speed Internet at competitive rates" and that its experienced communications professionals are equipped to connect customers with entertaining contents.
To address this request, we began by first, finding the two competitors of MaxxSouth Broadband. To achieve this, we reviewed the business segments/operations of MaxxSouth Broadband and found that it focuses on "a comprehensive suite of internet, phone, and TV products to give businesses a competitive edge" in the US. Furthermore, according to ZoomInfo, it has a revenue of $34.6 million and 173 employees. Then, we looked through business directories like Owler and ZoomInfo to the competitors that are listed for MaxxSouth Broadband. While Owler provided no competitor for MaxxSouth Broadband, ZoomInfo did provide eight competitors to MaxxSouth Broadband, such as Astound, ImOn Communications LLC, and Atlantic Broadband Inc.
Next, we reviewed the websites of each of these companies provided by ZoomInfo, to identify the companies that offer similar services or operate in similar business segments as MaxxSouth Broadband, in the US. To make the similarities between the target competitors and MaxxSouth Broadband closer, we opted for companies that also have closer ranges of employee count and revenue, as provided by ZoomInfo. With this, we could find that most of the US companies provided as competitors to MaxxSouth Broadband all provide internet, phone, and TV solutions. However, considering the companies with closer ranges of employee count and revenue, we chose ImOn Communications LLC (with $22 million in revenue and 208 employees) and D & P Communications Inc. (with $17.2 million in revenue and 86 employees) as the target competitors to MaxxSouth Broadband.
Having identified the competitors, we proceeded with finding the requested data points for each competitor, from their websites and the description of what they do to their target audience and competitive advantage. For these, we mainly relied on the company websites, company directories (like ZoomInfo), social media analytical tools, and review platforms (like Glassdoor and Indeed). Note that we could not find any funding data for the two companies. Research through databases, such as Crunchbase, Angel.co, and Owler; industry media reports from TechCrunch; and other third-party media articles yielded no useful information. Hence, we entered "N/A" into the appropriate cells of the attached spreadsheet.