October 31, 2014

Sector Portrait

Telecommunications: Whatever, Wherever - and Fast

Florida's telecommunications providers are scrambling to meet demand.

» Infrastructure Race

On the supply side, companies are racing to add infrastructure to keep up with the possibilities created by the expanding array of electronic devices and applications. More than 100 players have jumped into the telecom business in Florida, selling everything from wireless phone service to handsets to broadband, cable television and even cloud computing services.

"I don't know any industry that has seen technology change as fast as ours in the last few years," says Marshall Criser III, president of AT&T Florida.

For the competitors in the wireless world, revenue growth will come from providing gigabytes of data rather than voice minutes. And so they're spending big to accommodate the surge in bandwidth-intensive data traffic, whether that means enabling a business customer to run a credit card approval app on her smartphone or to download video quickly from YouTube.

"The user doesn't care how we make that happen. What they care about is experience," says Pamela Tope, Florida President for Verizon Wireless. Verizon has invested more than $1.3 billion in Florida since the company was formed in 2000 — $200 million in 2010 alone, she says. Ongoing investment will enable the company to offer its 4G LTE technology — its most advanced wireless cellular technology — throughout Florida within three years, she says.

Criser estimates his company will spend between $18 billion and $19 billion nationally in network infrastructure this year. From 2008 to 2010, AT&T invested more than $2.8 billion in its Florida wire line and wireless networks, the company says. "Our customers want to do whatever, wherever. They expect mobility," Criser says.

With competition for the consumer market so heated, telecom firms see potential growth from cultivating business customers. Big telecom players, including cable companies, "are going after law offices, doctor offices, any business that needs broadband or voice or TV as well. That's the next big opportunity," says telecommunications analyst Greg Ireland with IDC.

 

» Broadband

Broadband providers also are investing in infrastructure and counting on continued growth. As of May, 70 broadband providers in Florida served more than 6 million households, according to Connected Nation, a non-profit technology organization trying to bring affordable high-speed internet and broadband to all Americans.

The state has received approximately $39.2 million in federal awards for the improvement of broadband adoption and infrastructure. Most of it — just over $30 million — has gone to extend high-speed broadband services to underserved areas in 14 north-central Florida counties.

"One of the things that sets Florida apart is it doesn't have as many providers as other states do, and yet coverage availability is widespread," says Charles "Chip" Spann, director of technical and engineering services for Connected Nation.

As broadband availability widens in Florida, expect to see growth in services like voice over internet protocol (VoIP), internet protocol television (IPTV), web conferencing and cloud computing services, each of which uses the broadband platform. The Telecommunications Industry Association forecasts these four categories will be the fastest-growing components of the U.S. telecommunications market during the next four years.

Miami-based Terremark began offering "cloud" data storage services to businesses and government agencies in 2007, attracting a suitor in Verizon, which bought Terremark earlier this year for $1.4 billion. Verizon hopes the deal will give it more customers and clout in the cloud computing?market. "Businesses love to be on our cloud because it's more efficient and less expensive," says Marvin Wheeler, Terremark's chief strategy officer. "Verizon sees it as something that can move the needle on their revenue growth."

Tags: Business Services

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