Many people believe that the telecom industry became competitive when Divestiture occurred in 1984. But competition wasn’t truly realized until 1996, when Local Number Portability was mandated by the FCC.
Here are 5 keys to competition in the telecom industry:
Number Portability – Number Portability allows a business to retain its phone numbers when switching to a different carrier. Without Number Portability there wouldn’t be competition in the telecom industry. If a carrier could hold a company’s phone numbers hostage, it’s unlikely any business would change providers.
Local Access and Colocation. Local Access, also referred to the Last Mile and the Local Loop, is the connection from the demarcation point at a business to a provider’s point of presence. Colocation occurs when the competitive carriers place their switches and other equipment in the incumbent carrier’s wire centers. Local Loops and Colocation make it possible for competitive local exchange carriers (CLECs) to provide cost effective service. Without Local Loops and Colocation, CLECs would have to own or lease their own wire centers and deliver network to every business they serviced. It would be extremely difficult for a carrier to establish a network and remain competitive and profitable. The only companies that have been able to accomplish that are cable companies and they were given franchised areas that limited their competition.
VoIP – It’s much cheaper to establish one infrastructure instead of two. VoIP allows a CLEC to create one network for all their customers’ voice and data traffic.
PBX – A Private Branch Exchange (PBX) is a phone system owned by a business. It can provide phone features like Voicemail, Conferencing, Call Transfer, etc. Instead of paying the phone company $20 a month for a voicemail box, for example, a business can purchase voicemail functionality from a phone equipment vendor.
Customer Attitude. Once a business limits their service options to one or two carriers, they’re not going to experience all the benefits of competition. Unless a carrier is being pushed, it won’t offer its best pricing. Competition has brought down the cost of telecom services, so businesses aren’t as aggressive with their price shopping. Many businesses are limiting their choices to one or two carriers. This is reducing competition and could cause prices to rise.
If you would like to experience the benefits of competition in the telecom industry, contact CarrierBid today and let us shop your business phone and internet services for you.