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Shakeout in Telecom Industry Shows Signs of Stabilizing

Shakeout in Telecom Industry Shows Signs of Stabilizing

Competition Is Spurring Providers to Improve Custom Service

BY KEN MACDONALD

Few telecommunications companies exist as the 1996 Telecom Act had originally intended. However, the telecommunications industry is now beginning to stabilize following the financial meltdowns of 2001 and 2002.

Telecommunications companies that built out large networks by financing through debt have completed successful financial restructurings, and customers can now expect stability.

The industry is also beginning to show signs of life. Total spending in the U.S. telecom industry in the next three years will grow nine percent per year, rising to $963 billion, according to the 2003 Telecommunications Market Review Forecast, produced by the Telecommunications Industry Association (www.tiaonline.org) in Arlington, Va.

Competitive, facilities-based service providers now hold nearly 22 million phone lines in the country, representing about 11.4 percent of the total lines in the United States, according to statistics compiled by the Federal Communications Commission. That’s up from a 9 percent competitive local exchange carrier (CLEC) market share a year ago.

– Making A Difference

Telecoms with a national and local focus are making a huge difference for

customers.

Competition is starting to take root, particularly among national/local, facilities-based service providers. Such providers, who own and operate their own infrastructure across multiple regions, and are much less dependent upon third-party infrastructure to deliver services, have been able to provide solid customer service through the industry’s downturn. They are now demonstrating that true competition is a reality, which forces all telecom players to make significant improvements in customer service, develop innovative services important to customers, and bring more value to customers at competitive prices.

Improvement is starting to show in the areas most required by small- and medium-sized telecom business customers: simplicity, value, accountability, and reliability.

A provider that offers a comprehensive portfolio of services under one roof on a national and local scale allows businesses to greatly simplify their telecom purchasing decisions, and expect greater value from one accountable, reliable source. Until a couple of years ago, a business that had offices in multiple cities had to deal with several different service providers.

For example, the company’s Chicago office had to deal with SBC for local phone services, while its Denver office had to deal with Qwest. Long-distance voice services had to come from yet another provider such as Sprint or AT & T.; Now, imagine the fray of other providers this same business might have to deal with for Internet connectivity, Web hosting, private lines, and the headaches that thousands of businesses endured when service interruptions occurred, and each service provider pointed to the other for responsibility.

– What Should You Expect From Your Service Provider

Today, everyone from small business

customers with one office, to medium businesses with multiple locations in different regions of the country can rely on one national/local telecommunications provider for many or all of their needs, from voice to data services, greatly simplifying their purchasing decisions. In other words, simplicity.

– Small- and medium-sized businesses should expect greater value for their telecom dollar, from a single provider with a comprehensive portfolio of services, who can bundle everything a small- and medium-sized business needs, at a greater value.

– Businesses can also now rely on stable telecom providers with proven experience, consistently high levels of customer satisfaction, 24-hour customer care, and a single point of contact. This leads to accountability.

– Business customers can expect a service provider with a proven, national/local network to provide competitive service guarantees, increased response time in outages, and most importantly, reliability.

Telecommunications companies that financed the build outs of large national/local networks have completed successful financial restructurings, and can use their network assets to provide customers across the country with stability.

They are demonstrating the reality of true competition, which forces all telecom players in the industry to make significant improvements in customer service, and develop new and innovative services that are important to customers.

Improvement is starting to show in the areas most required by telecom business customers: simplicity, value, accountability, and reliability.

MacDonald is the general manager for XO Communications in the San Diego area.

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