May 18, 2009

Report: Independent Telco Boom Expected

Despite the continuing decrease in landlines across the United States, the overall independent telco market is expected to climb from about 10 percent of the total lines to 18 percent by 2015, according to projections by independent research firm Telecom Pragmatics. Some time in the second half of the next decade, the number will be at least double the current number of lines, bringing the industry back to a pre-1984 divestiture number of access lines.

A quarter-century ago, the independents made their profits selling voice lines to rural customers. In the future, they will offer quadruple play services in more Tier 2 markets and even in several additional Tier 1 cities. There will be a substantial increase in the number of lucrative opportunities in both the business and residential sectors. Thus, they will be able to increase their margins significantly.

Most of the increase is not going to be driven by overbuilding, but rather by the transfer of lines by the RBOCs. If necessary, the RBOCs will pay the independents handsomely to take undesirable lines off of their hands.