Communications
Market Insight
The telecommunication market has been struggling for a long time in the wake of the massive network overbuilding that took place between 1999 and 2002. The clean up continues, and in 2007 we saw signs that significant capacity had been worked off. Service Providers that offer both voice and data and focus on the small- and medium-sized business market saw major interest from the investment community. Similarly, wireless software companies that provide applications to the consumer market received interest from both investors and acquirers.
Trends to Watch
- Investments will be made in companies that offer the data, voice and video triple play.
- The small- and medium-sized business market will offer lucrative opportunities; low customer acquisition costs/churn and growth will be the key indicators of success here.
- Additionally, companies that deliver services to the SMB market via a differentiated delivery mechanism (e.g. fixed wireless) should also continue to grow and prosper in 2008.
- The mobile Web will also keep growing in importance during 2008. Companies that provide compelling applications for the consumer market should do well. We expect that the wireless consumer application market will continue on the cutting edge during 2008.
Financing the Future
Wireless is back. But unlike 1999 to 2004, when the focus was wireless software for enterprises, it's now all about wireless infrastructure, services and applications that are targeted at consumers. This is a fast-growing market that offers tremendous opportunity. In our opinion, the companies that are able to migrate from the consumer market to the enterprise market have the potential to create billion-dollar market caps.