Looking at market share held by the largest three companies in the industry, one can clearly see that industry consolidation rises over time. The existential danger is the bend of the S curve late in the cycle, which shows loss of market share to new competitors or products.
For telecom service providers, the danger is that late-cycle shrinking of the core market.
Eventually, the S-curve suggests, entire markets become unstable, and can shrink, because of changes in technology, customer demand and business model evolution, almost always from outside the traditional boundaries of the industry.
We already have seen this for key segments of the telecom industry, where long distance revenues changed from high margin, high volume to low margin, low volume. We have seen the shrinkage of fixed network voice lines in many developed markets, lower profit margins and revenue from mobile voice and messaging.
At the same time, mobility has assumed the role of driver of industry results globally, while internet access and video services have replaced some of the losses from voice services.
That sort of product replacement is normal.
The big industry question is what replaces mobility as the industry driver, as mobility growth reaches saturation.
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