In last week’s blog posting, we discussed trends that are forecasted to occur in 2016. Some of these predictions included more research and development in the telecom industry by way of offering more innovative products and services for which customers have been clamoring, as well as expanding into newer market segments.
As was discussed, the largest telecom vendors are planning to increase their revenue base by going after the larger customers. These are the big businesses that are constantly needing both Internet and Unified Communications-based services. There will be intense competition to capture this piece of the market, as it has been predicted that there will be just two or three telecom giants doing this.
Also, there have been rumors that telecom vendors will be going after the underserved markets, as well. A typical example of this is when rural communities in desolate areas, such as small farming towns and cities. However, according to a newswire that was recently released, even expanding into this market segment will prove to be difficult.
For example, Frontier, an established telecom carrier that has already established a footprint in this market, has described that it can cost up to $1 billion to provide internet, cable, and voice communications to these rural communities. This can be very costly for any telecom vendor.
In order to help alleviate this burden, the FCC launched a program known as the “Universal Service Fund.” With this, telecom vendors would receive certain subsidies to help offset their costs when offering their services to rural markets.
But, as of December 2015, funding for this program ceased to continue. To date, it has been unclear whether or not the FCC would ever again fund the program. According to a Fierce Telecom story, “Other service providers like AT&T have been critical of the FCC’s move with one executive, likening it to someone shoveling a part of a snowy sidewalk.”
In the end, only time will tell if the rural markets will continue to be served. Stay tuned for details.
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