Brief Excerpt from Industry Overview Chapter:
Companies in this industry purchase network access and capacity from telecommunications carriers and resell wired and wireless telecommunications services to businesses and households. Most major carriers provide network access to resellers on a wholesale basis and also own reseller brands. Major US companies include AT&T's Cricket Wireless, Sprint's Boost Mobile, T-Mobile's MetroPCS, and Tracfone Wireless (owned by Mexico's America Movil). Outside the US major companies include Truphone and Lycamobile (both based in the UK) and CITIC Telecom International (Hong Kong).
Demand is driven by consumer spending, growth in business activity, and new technology. The profitability of individual companies depends on efficient operations and good marketing and customer service. Large companies enjoy economies of scale in purchasing telecommunications services to resell. Smaller companies can compete effectively in niche geographic markets. The US industry is concentrated: the top 50 companies account for about 75% of revenue.
PRODUCTS, OPERATIONS & TECHNOLOGY
Telecommunications resellers offer services at lower prices and with more flexible plans than traditional carriers because they obtain bulk access to networks at wholesale rates and set retail prices independently.
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