Running head: WIRELESS TELECOMMUNICATION INDUSTRY IN THE USA 1
WirelessTelecommunication Industry in the USA
WirelessTelecommunication Industry in the USA
TheUSA wireless telecommunications industry has seen such an enormousgrowth in the last five years, with most of the people acquiringmobile devices. The rate of the penetration of the mobile phone hasbeen huge with most people opting for portable devices rather thanthe landline connections. According to the CTIA data, the level ofpenetration is huge with more than 355 million Americans connected tothe mobile phones at the moment. By 2014, the revenue generated bythe sector stood at $204.7 billion which demonstrates the magnitudeof the industry (Nakar, 2016). The industry has been expandingespecially in the advent of the iPhones and the 4th generationnetwork which has ensured faster connections and sophisticatedcommunications. The consumption of the service is moving from thevoice calls to data to access the internet and also to use the manyapplications that have been developed and continues to grow atstartling rates. Due to vicious competition that has been experiencedin the market in the last five years, mergers have been inevitable.For example, Softbank acquired Sprint and the subsequent acquisitionof Clear wire in the succeeding months. T-mobile also purchasedprepaid carrier which indicates that the industry has been in theconsolidation phase. The revenue generated in the Industry isexpected to hit $281.3 billion by 2019 which is huge revenue by anystandards (Karjaluoto, et al. 2012). With the increase in populationand the increased purchasing power, the wireless devices havepenetrated due to the evolving functions they serve. The mobilephones and tablets have seen people develop mobile offices around theworld. People are no longer being held up in particular areas due towork related issues (Nakar, 2016). People are now working from anyplaces, with most even working from home as the penetration of theinternet has become a reality. The devices are used for Banktransactions and money transfer systems.
Thewireless communications industry is in the maturity stage of thebusiness cycle. After a long and fruitful period of rapid expansion,the industry has matured and is in the final stage of the life cycle(Nakar, 2016). Although the sector is still growing, it clearly isnot advancing at rates like it experienced in the past years. Thepower of the customers is increasing because their capacity exceedsthe demand of the wireless devices, such as the mobile phones (Yu, etal. 2016). The power of the suppliers is declining because thevolumes bought critical to the providers. There is fierce competitionas some of the suppliers lose customers, which is quite damaging totheir businesses. The threat posed by the substitutes and cheaperwireless devices is real as new providers endeavor to enter themarket (Yu, et al. 2016). The industry is consolidating, and severalof the major players have emerged to weather the storm existing inthe industry at the moment. There is a fierce rivalry in the industryas the suppliers endeavor to win customers as the prices fall posinga significant threat to profitability (Nakar, 2016).
Theclients of the US wireless telecommunication industry are themajority of the American population most people can afford a mobiledevice which is positive for the development of the industry. Theonly issue is the quality of mobile device as sophisticated gadgetsare quite expensive, and the majority of the people cannot affordthem. However, the standard devices that have capabilities to applythe internet are available to the majority of the consumers (Nakar,2016).
Thesuppliers of the wireless mobile and other telecommunication devicesare the multinationals such as Verizon Wireless, AT &T Mobile,Sprint Mobile, and US Cellular, Who have set up production facilitiesin the country. Others do their production abroad, mainly in Chinaand even in the European countries (Nakar, 2016). The main reason whysome of the suppliers have set up production facilities outside thecountry is to lower the cost of production and hence remaincompetitive in a field that has experienced an intensive competitionin the recent past
Thereare substitute products in the form of cheaper mobile andtelecommunication devices. The organizations in the industry areengaged in a fierce competition in an attempt to capture and controlsections of the market (Nakar, 2016). Price wars have therefore beendominant, and it will continue as long as demand for the productsremains high.
Atthe moment, it is quite difficult for new entrants into the industrydue to the healthy competition going on in the market. The industryhas matured, and the big players are in a fierce fight to takecontrol of the market. Therefore, it would be difficult for any newplayer to penetrate a market where even the most establishedorganizations in the industry are finding it hard to navigate theterrain (Nakar, 2016).
Currently,the major competitors in the wireless telecommunications marketinclude Verizon Wireless, which controls approximately $150 millionworth of revenue in the market. The company has a presence in most ofthe regions within the country (Nakar, 2016). Another competitor inthe market is the AT &T Mobility, which has a revenue base of$140 million, which implies that its distribution capacity is almostcomparable to the top organization in the industry. Other competitorsare T-mobile, Sprint Corporation, and US Cellular which controlsrevenues to the tune of $70, $60 and $5 million respectively.
VerizonWireless has the best strategies among the existing competitors. Thecompany adopts a policy that is based on its operating income (Nakar,2016). The company has laid down the infrastructure necessary for theorganization to achieve differentiation around the world. The companyendeavors to provide premium services as it attempts to meet theincreasing demands of the consumers. The strategy adopted by thecorporation achieves global practices due to joint venture nature ofthe entity (Agrawal & Zeng, 2015). The company endeavors tofulfill the promises made to the customers as its strategies inmarketing to meet the needs of the large customer base. Theorganization has the highest network technology, and none of theother competitors comes close. The company also provides the bestcustomer care service in the market which continues to make theorganization win the confidence of the consumers and hence dominatethe market (Yu, et al. 2016). The company also offers a wireless dataand multitude offerings which are popular and hence are primarysources of revenue for most of the wireless telecommunicationsproviders.
Thedrivers for change in the industry is customer care and after salesservice. The fact that the industry is at the mature stage impliesthat only the most innovative competitors will survive the market inthe face of fierce competition (Yu, et al. 2016). More research intechnology would determine the future of the market as rivals createunique products to address the needs of the market. From the existingrevenues of the industry, the market would command revenues estimatedat $330 billion by the year 2021 although that is subject to thedynamics of the market.
Agrawal,D., & Zeng, Q. A. (2015). Introductionto wireless and mobile systems.Cengage Learning.
Karjaluoto,H., Jayawardhena, C., Leppäniemi, M., & Pihlström, M. (2012).How value and trust influence loyalty in wireless telecommunicationsindustry. TelecommunicationsPolicy,36(8),636-649.
Nakar,P. S. (2016). Design of a compact microstrip patch antenna for use inwireless/cellular devices.
Yu,J., Horel, G., Patwari, J., Klein, M., & Oliver, M. (2016). U.S.Patent No. 9,232,077.Washington, DC: U.S. Patent and Trademark Office.