27 January 2004 New York, Lightwave--Telecommunications executives can anticipate broadband adoption growth, new broadband appliances, rising voice over IP (VoIP) subscribers, and increased offshoring in 2004. Deloitte Research's "Wire-line Predictions 2004 Report" highlights 10 trends that uncover new opportunities for revenue through increased deployment of wire-line technologies.
"Amidst the intense competition and regulatory hurdles in the telecom industry, flexibility in pricing and increased broadband demand will drive a deeper penetration of wire-line and wireless technology in households and businesses alike," said Phil Asmundson, managing partner of Deloitte's Technology, Media & Telecommunications (TMT) Group. "Broadband will become progressively more mainstream as broadband appliances stimulate uptake. Operators are investing again and consumers are hungry for new applications, based on both wireline and wireless networks."
While overall broadband adoption will continue to grow in popularity within the United States, small businesses will be motivated to migrate towards broadband as the demand for faster email and Internet access increases while pricing falls and connection speeds rise. New broadband appliances such as game consoles, video phones, home security systems, set top boxes, VoIP phones, digital hi-fi and home media systems will also drive robust broadband adoption this year and expanding broadband's functionality beyond PC-oriented technology. The industry's ability to launch compelling broadband appliances will have a direct impact on broadband demand.
As consumers continue to embrace broadband, the United States will likely join Japan in boasting over 1 million VoIP subscribers. Contributing to this popularity will be enterprise adoption of VoIP into their core networks. The business market will begin to migrate to VoIP, compelling operators to prepare for the transformation of the telecommunication industry.
Offshoring will also gain traction by providing the fixed telecommunications industry with a vehicle to meet the growing demand, moving selected processes offshore to reduce internal costs. Offshoring communications requirements also represent a significant opportunity for the industry, providing voice and data communications to the many American firms looking to relocate processes abroad.
The complete list of 10 wire-line predictions in 2004, as outlined by the Deloitte report, is as follows:
1. Steady broadband adoption.
2. The broadband appliance hits the High Street in Q4, 2004.
3. End-to-end VoIP is an essential element of operator's general strategy, even if usage in 2004 will be niche.
4. Data charging becomes variable, as price gets flatter.
5. Wire-line still dominates voice.
6. WiFi hot spots will remain more froth than substance.
7. Wireless LAN will have most impact in non-office enterprise environments and will drive demand for the core network.
8. A wide range of competitors will continue to reduce incumbents' market share.
9. Offshoring will offer a double opportunity for the fixed communications sector.
10. Operators turn to technology for revenue growth.
The report was compiled by the TMT group within Deloitte Research. Input was provided by clients, leading industry and financial analysts, and the 4,000 strong global Deloitte TMT team. Full copies of the report are available at www.deloitte.com.