Industry Overview
The telecom industry is at the forefront of the information age. We are capable of delivering voice, data, and video at ever increasing speeds and in an increasing number of ways. There are many different component of the Telecom industry. LEC's ,CLEC's, Long Distance companies, PBX manufacturers, Value Added Resellers, VoIP Carriers, Hosted Solutions, Tier 1 ISP's, ISP's, Service companies, wireless providers and a few others. Here is a breakdown of the sectors in the Telecom Industry.
LEC's: These are the large local exchange carrier. This is your local legacy phone company, AT&T or Verizon, PAC Bell, Bell South and others. They deliver a full range of services from local service, long distance, Interent connections, point to point data connections and almost anything associated with phone lines and services.
CLEC's: These are your Competitive Local exchange carriers, Time Warner, Grande Communications, XO, Cbeyond, and others. They deliver a full range of services, usually very similar to the LEC.
Long Distance Companies: This part of our business is changing rapidly. Because of the emergence of VoIP most pure Long Distance companies have had a tough time. Long Distance rates have dropped in the last 10 years from 25 cents a minute to 0 cents in some cases. Free services are in the fast track; the only thing they are having a tough time with is quality of service. Because of that, "free" is not always the best solution for your business needs.
PBX Companies: They make the phones and systems that you have in your offices. Whether it's the huge companies like NORTEL, AVAYA or SIEMENS, they have all had to adapt to the change in technology. Some companies like Cisco, a traditional router based company, have entered the telecom space by acquisition. Mitel, a 35-year-old Canadian company was quick to grasp the VoIP market and has done a great job in transitioning their legacy systems to VoIP. Newer companies like Shoretel have been quicker to adapt to the VoIPmarket, because they started with VoIP and are not encumbered by their legacy-installed-systems.
Value added resellers: We deliver, install, and support the products that the PBX companies produce. We are typical authorized resellers of those products and held to standards like making sure that our technicians are trained and certified, that we maintain parts supplies of the systems that we sell and that we keep up with the changes in the products so we can support our customers. We used to be called Inter-connects, but our space in the market has changed dramatically. Our technicians used to deliver cabinets, attach them to the wall and to the public telephone network and punch a few wires down and that was it. I am over simplifying, there were a lot of wires and it was very complicated for a new person to grasp the wiring schemes, but once you knew the color codes, it made sense. Now as our technicians work on our new systems they carry laptops and software. They don't do as much "punching down"; they use patch cords. Our industry has moved into the IP space. They have to deal with routers, applications and network connections.
Hosted solutions: The VoIP age has brought back the old "Centrex" in a VoIP flavor. It is renting the phone system and features from a carrier, you still have to get the phones and the back end of the solution comes thru the internet or a private data connection. It is a good concept and works well for certain types of businesses, but quality bandwidth is expensive so in many cases you spend much more for this type of solution.
Tier 1 ISP's: These are companies like Level 3, Cogent, and others. Most of you have never heard of these companies because they are typically behind the scenes. They sell the bandwidth to the names that you hear on a regular basis. They own the fiber and bandwidth in large cities and between those cities. They provide the network for our huge national data network.
ISP's: You may get your internet connection from an ISP, it could be a large one or a small company. They deliver your access to the internet, they may have other services but that is their primary objective.
Service companies: They usually do not sell new systems, they just support existing systems with service and parts.
Wireless Providers: This industry is changing at a very rapid pace. Bandwidth requirements for PDA's has caused a real change in the way wireless is deployed and the technology is moving from WAP, GPRS to 3G. No question about it the technology will get better and with that they will have to develop better ways to improve QOS and security.
That's kind of a break down of the telecom industry, stay tuned because it will change soon.