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Showing some backbone
Powerful market forces have caused a lot of pain for the telecom industry in 2001—pain that was largely predicted by a McKinsey–J. P. Morgan study of services based on the Internet Protocol. The dramatic growth of IP-based traffic, and the subsequent collapse of prices, pushed many companies to the brink. This graphics-rich summary of the study's findings traces several key trends: growing IP-based traffic; dislocation among incumbents; declining prices, revenues, and network costs; and the consolidation of the industry.
The take-away: In a competitive environment marked by falling prices and slower growth, a company's best bet is to maximize the scale and usage of its network. But even then, many will fail or be absorbed by others.
Articles provided by The McKinsey Quarterly
© 1992-2003 McKinsey & Company, Inc
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