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July 06, 2011

Communciations Provider: Smartphones and Tablets Increasingly Taking Over Market Share from Basic Mobile Handsets

By Anil Sharma, TMCnet Contributor

Zacks Equity Research in its recent industry outlook report on telecommunications industry has found that smartphones and tablets have become the next-generation products of choice by customers and are increasingly taking over market share and growing in demand to be delivered to end users by communication providers.

According to the report, the growth in the smartphone market has maintained its impressive trend, inspite of the fact that the economy is still in a recovery phase.

Zacks Equity said that this reflects a shift in consumer preference toward application-rich devices from ordinary mobile handsets used primarily for voice telephony.

Zacks Equity Research while discussing major players the telecommunications industry, including AT&T, CenturyLink Inc., Qualcomm (News - Alert) Inc. and Comcast Corp said that this opportunity provides scope for communication providers, equipment developers, chipset manufacturers and wireless tower operators to retain new users and grow revenues moving forward.

A majority of communications providers in the West about a decade ago were upgrading their existing networks to high-speed 3G technologies. At present, the world telecommunications industry is talking about the installation of next-generation super-fast 4G technologies.

Several giant telecom operators globally are funding projects to deploy super-fast 4G networks of WiMAX (News - Alert) and LTE (Long-Term Evolution). As of now, 19 LTE networks are commercially operational throughout the world.

The GSM Association forecasts that within the next 5 years, communication providers will invest approximately $100 billion to upgrade their respective networks to accommodate hassle free transmission of mobile data and video traffic. The major technical areas will be High-Speed Packet Access (HSPA), 3G mobile broadband, and next-generation (4G) LTE (News - Alert).

According to Zacks, massive technology invention and innovation have resulted in the creation of competitive atmosphere within the communications industry which is resulting in hectic merger and acquisition activities to consolidate the market share.

The biggest of the merger and acquisition activity is AT&T's (News - Alert) proposed buyout of T-Mobile U.S. If this deal gets regulatory approval, it might become the largest acquisition in this industry in the post-recession period.

In other major deals, CenturyLink Inc. has acquired Quest Communication, Qualcomm Inc. has acquired Atheros Communications, and Comcast Corp. has purchased NBC Universal's (News - Alert) 51 percent stake.

Anil Sharma is a contributing editor for TMCnet. To read more of his articles, please visit his columnist page.

Edited by Jamie Epstein

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