Wireline forecast stable (for now)

The future of the American wired telecom market is a mixed bag, depending on how you read Moody’s latest research report on the sector.

Overall, the ratings service believes wireline carriers will stabilize this year thanks to consolidation efforts and a boost in high-growth services such as IP and data. Cost-cutting is also paying off.

“When looking at the business fundamentals of the entire wireline sector, revenue stabilization among residential customers is continuing as telecom operators, particularly AT&T and Verizon, have enhanced their broadband and video capabilities to match or exceed cable’s offerings,” Moody’s senior vice president Dennis Saputo said in a prepared statement. “Moreover, residential wireline voice revenues are becoming a much smaller component of the major telecommunications’ companies revenue streams.”

Nonetheless, carriers remain challenged by protracted economic concerns as well as the cable industry’s growing competitive threat in business telecom offerings. Carriers’ business revenue is expected to remain flat or decline in 2012 and 2013 as US employment grows and cable firms grab more corporate market share.

To sum it up, it’s not the rosiest of crystal balls for an industry that continues to struggle against wireless and cable penetration. In the meantime, we can expect carriers to continue diversifying their offerings to offset access line losses.

Lee Simmons

Lee Simmons is a business writer in Austin. He covers the technology and media industries for Hoover's and offers random musings on the state of entertainment (among other pressing issues) for Bizmology. Follow him at Twitter.

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