GartnerGroup's Dataquest Says European Telecom Deregulation Fails to Liberate Potential in New Telecom Carriers
Dataquest Reports What New Carriers Should Do to Maximize Chances of Success
Paris, France, June 7, 1999—According to industry analysts at Dataquest Inc., a unit of Gartner Group, Inc. (NYSE: IT), new telecommunications operators are failing to capitalize on the market opportunities presented by telecom deregulation and have not succeeded to date in taking away critical market revenue from established public telephony operators (PTOs).
Speaking today at Dataquest's annual conference, Dataquest Predicts 99, analysts highlighted that many of Europe's PTOs are still retaining the lion's share of their national call markets. Companies such as France Telecom held on to 97 percent market share in 1998, and British Telecom maintained 76 percent of the United Kingdom's national market in 1998.
Although the carrier market has developed at an unbelievable pace, it appears that new carriers have been slow to grow revenue and market awareness. Many new operators have been unable to capture the lucrative corporate user market, where the belief is still very much that PTOs provide greater network reliability. Only incentives such as discounts of up to 20 percent have been enough to entice them to a new, untried operator.
Dataquest analysts noted that significant progress will be made by the end of 1999. "Many new operators have fallen into the trap of a 'me-too' approach to marketing, by simply modeling themselves as a cheaper version of the PTO," said Steve Wallage, principal analyst Dataquest's Public Network Infrastructure Europe program. "To be a price discounter is not a sustainable position, so the opportunity in today's European market lies in developing new niches and by targeting specific areas of the market. New operators need to think about tailoring services for vertical markets based on their specific needs-something that PTOs have been much less capable of."
According to Dataquest, one further hurdle for new carriers is a thorough understanding and ability to influence the national regulatory authorities, because this will be a key requirement if operators are to become successful in the long term.
Nonetheless, new operators need to move fast, because the next three years will be critical within the carrier market. Having rapidly evolved over the past 18 months, the next stage will be one of consolidation. New carriers and PTOs will jostle for the dominant positions, and consolidation will be the only way forward for some of the major and established companies. This stage has preceded all expectations and is set to become even more complicated by the influx of nontraditional telecommunications companies, such as Microsoft, entering the battlefield.
Now in its second year, Dataquest Predicts 99 offers delegates the equivalent of eight different conferences all under one roof. The conference is built around seven themes, or "tracks," examining Internet and e-commerce, telecommunications, storage, computers and peripheral systems, IT services, enterprise software, and semiconductors. For those delegates who also wish to get a broader industry perspective, the Executive Overview will provide a plain English guide to the IT industry, where to invest for growth, as well as pinpointing all the hottest technologies.
For more press information on Dataquest Predicts 99, please contact Emma Clark at 04 03 338 169, emmac@text100.co.uk, or Sarah Wadsworth at +181 242 4238, sarahw@text100.co.uk.
To subscribe to Dataquest programs, please call 800-419-DATA or 408-468-8009. More information about Dataquest's programs, descriptions of recent research reports, and full text of press releases can be found on the Internet at http://www.dataquest.com.
GartnerGroup's Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry.
As the world's leading authority on IT, GartnerGroup provides clients with a wide range of products and services in the areas of IT advisory services, measurement, research, decision support, analysis, and consulting. Founded in 1979, with headquarters in Stamford, Conn., GartnerGroup is at the center of a global community serving Fortune 1000 clients from 80 locations worldwide. Additional information about the company is available on the Internet at www.gartner.com.
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