Telecommunications Resellers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 1,800 telecommunications resellers in the US either sell local, long distance, or wireless phone services using other companies’ networks, or sell and install phone systems for businesses using third-party equipment. Local fixed line service resellers include competitive local exchange carriers (CLECs) who resell local phone services using the networks of incumbent local exchange carriers (ILECs). Equipment resellers resell products from equipment suppliers (Avaya, Cisco, etc.) and provide system integration services for small and medium businesses.
Transition To Internet Telephony
The telecommunications industry is in the midst of a transition from traditional fixed line circuit switching for voice traffic to packet switching of voice, data, and video over the Internet and wireless networks.
Dependence On Economy
Spending on telecommunications services is driven by business activity and demand for telecommunications resellers falls when the economy is weak.
Industry size & Structure
An average telecommunications reseller has about 23 employees and about $16 million in annual revenue.
- The US has about 1,800 telecommunications resellers who employ 42,000 workers and generate about $20 billion in revenue.
- The industry is moderately concentrated - the top 50 companies account for 82% of industry revenue.
- At the same time, there a large number of small companies - about 79% of telecommunications resellers have less than 10 employees.
Industry Forecast
Telecommunications Resellers Industry Growth
Recent Developments
Mar 19, 2024 - Weak Sales Growth Expected
- Telecommunications reseller sales are forecast to increase at a 3.06% compounded annual rate from 2022 to 2027, slower than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc. Industry employment decreased moderately during 2023, according to the US Bureau of Labor Statistics.
- Commercial Chapter 11 bankruptcy filings increased 72% year over year in 2023, according to Epiq AACER. Bankruptcy filings may reduce spending on annual maintenance contracts. Overall commercial filings increased 19%. Subchapter V bankruptcies within Chapter 11 increased 45% during the period. “Though still below pre-pandemic figures, bankruptcies in all filing categories climbed last year amid the evaporation of pandemic emergency responses, increased interest rates, and tougher lending standards,” said Amy Quackenboss, executive director at the American Bankruptcy Institute.
- Global smartphone shipments decreased 1% year over year in Q3 2023, according to Canalys. The global smartphone market has decreased year over year for the past seven quarters due to the COVID-19 pandemic, the global chip shortage, and the Russian invasion of Ukraine, Canalys analysts said. Canalys forecasts a 4% expansion in the global smartphone market in 2024, driven primarily by emerging market economies and renewed consumer spending.
- Hackers are turning to traditional IT remote monitoring and management tools to execute cyberattacks on businesses and other organizations. Legitimate monitoring and management tools used by organizations including telecommunications resellers are being used by hackers to discover client-side applications and to conduct exploitation/post-exploitation activities. “The problem of course, is their effectiveness for legitimate security professionals make them effective for cybercriminals who crack them to remove any licensing requirements to use for free,” according to Chris Clements, vice president of solutions architecture at cybersecurity firm Cerberus Sentinel. “There are numerous hacker malware packages that are great for controlling computers, but they run the risk of being detected and removed by endpoint protection tools like anti-virus software and endpoint detection and response software,” Clements said. “Remote monitoring and management tools by and large eliminate this possibility as they are very often deployed for legitimate IT administration purposes.”
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