The Fall of Big Tele
Comcast and Verizon are dying a slow death.
Comcast, Verizon and other government-protected duopolies won’t be around for your grandchildren to enjoy — at least not in their current forms. You see, companies like these are selling outdated services. And they’re more than reluctant to change their business models.
Consider the home telephone. This beast is becoming scarcer by the day. In fact, mobile phone-only households are becoming the norm. Yet despite huge increases in wireless sales by traditional telecoms, it’s the wireline segment that keeps these blue chips in the black. More than half of Verizon and AT&T’s revenue comes directly from wireline sales.
For the old-school telecom giants, it’s all about infrastructure. They want to milk the cable and phone lines for all they’re worth. After all, it took decades — and millions upon millions of dollars — to create these vast systems that pump TV and telephone service into our homes.
But the communications landscape has changed. We don’t need separate wires to connect our homes to world. Now it all comes back to bandwidth.
The technology is ready. Wireless dominates the landscape, and the old-fashioned telecoms and cable providers can only desperately hang on to their antiquated services. Even the government — which normally favors any out-of-date and/or irrational business model — is coming around.
In the end, technology will win, and media convergence will open the door to new data service packages for customers that will provide phone, television, gaming and Internet service through lightening-fast, reliable wireless connections.
It will be the beginning of a new tech boom. Companies such as Limelight Networks Inc. (NASDAQ: LLNW), a content delivery network (CDN) provider that offers a variety of services, including live Internet video feeds, will thrive. In fact, Limelight’s lucrative contracts with heavy hitters like MSNBC have helped the company grow its revenue more than 500% over the past three years.