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MarketingVOX: The broadband needs of media users have brought digital media-savvy telecom companies back from near-death, reports BusinessWeek.
Seven years ago the telecom industry was hit hard as the Internet Bubble economy burst, sending companies into freefall, costing hundreds of thousands of people their jobs. But now the infrastructure that's required to deliver music, video and more online means some of those companies are roaring back to life.
Pipes have gotten bigger and faster as people watch videos on YouTube, buy songs off iTunes and publish rich media ads onto blogs.
Profits at telecom companies are expected to be higher this year than in 1998, the peak of Web 1.0. That year, profits hit $65 billion; this year they are expected to hit $72 billion.
But some say the telecom companies have done little to innovate on their own, limiting their profit potential. Put bluntly, they control the highway, but not the way people are driving on it, a dramatic shift from ten years ago.
Some worry that a declining market for wireless phone services could be the precursor to another major industry bust. The restraint currently demonstrated by investors, gun-shy after the last bubble, soothes some of those fears despite predictions of dramatic media usage growth.
New subscriber growth in wireless phone services is expected to decline for the first time this year.
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