If being an unregulated monopoly is the best of all possible worlds for an industry, then being a regulated non-monopoly arguably is among the worst of situations. And that might be where the legacy providers in the global telecom industry find themselves.
Considered carriers of last resort, many legacy service providers are compelled to sell wholesale capabilities to competitors, meaning the underlying carriers cannot reap all the rewards of investments in their networks.
In other cases, the legacy carriers also have service obligations none of the other competitors face.
Always a slow-growth business, telecom at least had the luxury of guaranteed rates of return and a bar on lawful competition. Today, telecom increasingly is becoming a slow-growth business without legal barriers to entry by competitors.
STL Partners forecasts less than 1% CAGR in telecoms revenues
There are many potential business implications of slow or negative growth. Unchecked, the enterprise simply becomes unprofitable and then shrinks, before being acquired by a stronger and larger firm, or simply going out of business. Revenue growth rates of one percent are troubling especially if general rates of inflation are higher than one percent.
The answer many connectivity providers pursue, aside from mergers and acquisitions to boost gross revenue and cut costs, is to diversify into other lines of business that can more than replace any losses in the legacy business.
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