TABLE OF CONTENTS The development of the worldwide telecommunications services industry after nearly two decades of liberalisation, privatisation and regulation presents a mixed picture whose parts give rise both to satisfaction and disappointment. On the positive side, prices in this industry have plummeted both in nominal and real terms, while competition is now a reality in the long-distance, international and corporate markets of many countries. BT has less than 50 per cent of the long distance market for certain customer groups such as in the City of London, while at one stage MCI WorldCom was able to claim it had become a larger carrier than the former incumbent AT&T.
Nonetheless, incumbent dominance in the access sectors of most countries has barely been dented. BT is still dominant, retaining about 80 per cent of the UK residential access market, while many former monopolists have kept a greater portion than this of their access markets. BT still makes the bulk of its profits from traditional services. The bursting of the telecommunications investment bubble and the downturn in the telecommunications, media and technology (TMT) sector have seen potential competitors, once financially potent, now deeply indebted and desperately short of access to fresh investment funding. The market for long distance carriage has been confounded by spectacular improvements in the capability of dense wavelength division multiplex (DWDM) optical fibre technology. The resulting overhang of excess capacity, driven also by optimistic predictions of data volume growth, will exert a downward force on revenues for some years.
