AT&T and Verizon: Where is the Growth?

Every now and then it is useful to reflect on actual revenue trends for the two U.S. telecom firms that represent the clear majority of all telecom revenue on an annual basis.

So put yourself into the position of running one of those two companies, take a look at where your revenue is, where the growth is, and then ask yourself how much money you'd be willing to invest in your various lines of business.

At Verizon, over the past two years, fixed line voice revenues have declined from 21 percent of total revenue to 19 percent. At AT&T voice revenues have dropped from 24 percent in 2010 to 21 percent in 2011.

At Verizon, wireless revenue has grown from 58 percent of total revenue in 2009 to 63 percent in early 2011. At AT&T, wireless revenue has grown from 46 percent to 49 percent in a year.

Equally important, mass markets revenue, which includes consumer and small business revenue, has remained flat at Verizon over the past year. So has "small business" revenue. Enterprise revenue likewise was flat, year over year.

At AT&T, though, business services revenue (IP data)  was up 19 percent. U-verse revenue was up , the most significant element being IP revenues, up 26 percent year over year.

A rational manager might well conclude that incremental resources should be plowed into wireless and enterprise services, resources should be decreased in voice and maintained in broadband access, since that is where the revenue growth is. Even within the "IP" services segments, though, video might be the single most significant product, in terms of growth.

Other service providers, with different customer profiles and assets, will have to consider different choices.