Vertical Outlook: Telecommunications

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2005 YTD pages: 6,976.9

2004 YTD pages: 7,289.4

% change: -4.29%

Bright spots: Both the mega software companies and cable companies are scrambling to get into the telecom space, creating new ad revenue streams for trade titles.

Challenges: Ongoing consolidation among telecom companies may end up squelching competition, which, in turn, could put the squeeze on marketing budgets.

While the ongoing consolidation in the telecommunications industry continues to cut into marketing budgets, media covering the sector should see new lines of business this year and beyond.

Many of the top software players, including Hewlett-Packard Co., IBM Corp., Microsoft Corp. and Sun Microsystems, are taking pains to cross over into the telecom sector, filling in gaps created by high-profile mergers in the industry.

Software companies "are all deepening their investments into telecom," said Lisa Pierce, VP at Forrester Research, who covers business-class telecom services. "So if you're not getting much money from Peter, Paul may be able to help you out."

Trade titles should attract new ad dollars once the merged telecom companies start to roll out major marketing campaigns to build their brands and generate sales leads, said Jay Pultz, a telecom analyst at Gartner Inc.

Mark Hickey, publisher of Telephony, said he expected single-digit growth in 2006 for Telephony's print products and double-digit growth online.

To cater to the changing telecom environment Hickey last year launched two separate supplements to Primedia Business Magazines and Media's Telephony. One focused on the WiMAX Forum, an industry-led, nonprofit corporation formed to promote broadband wireless products, and the other tackled Internet Protocol Television.

Hickey's media strategy may be a harbinger for the sector.

Josh Holbrook, a telecom analyst at the Yankee Group, said that because telecom companies historically have been heavily regulated, they're still pretty unsophisticated when it comes to marketing. "Deregulation is less than 10 years old," Holbrook said, "so it's incumbent upon media vehicles to educate [the telecoms] and offer more market segmentation." -M.S.

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