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Opportunities for PSPs in the Telecommunications and Utilities Industries

Opportunities in the Telecommunications and Utilities Industries

Print Service Providers (PSPs) and Marketing Service Providers (MSPs) that are looking to serve the telecommunications and utilities industries will find plenty of opportunities. According to a recent research report from InfoTrends entitled The Document Outsourcing Evolution: A Vertical Market Analysis, the telecommunications and utilities industries are among the top outsourcers of document services. They are also leaders in “green” initiatives and place an emphasis on suppliers that have sustainable policies in place.

Understanding the Telecommunications and Utilities Industries

To establish credibility with executives in the telecommunications and utilities industries, it is important to have some knowledge about their respective industries. This includes the competitive landscape, the issues and challenges they are facing, the types of companies within the industries, and how they are segmented. The next level of research is to gather company-specific data. While there will be certain commonalities across the industry, each company has its own unique characteristics, challenges, and opportunities that must be considered, along with any general industry information.

Telecommunications Defined

Overview

First, we will consider how the U.S. Census Bureau defines the telecommunications and utilities industries. The Census Bureau classifies companies using a coding system called the North American Industry Classification System (NAICS).

As might be imagined, the telecommunications industry is a complex mix of wired providers, wireless providers, and cable TV providers. Add to that the growing popularity of Voice-over IP (VoIP) or Internet phone services, and the landscape becomes even more cluttered. In fact, the NAICS system lists 14 different classifications of telecommunications companies, including installation contractors, rentals and leasing, and management consulting services.

Utilities Defined

Overview

Utilities fall into three basic categories under NAICS classification 22, including:

• Electric Power Generation, Transmission, and Distribution: This industry group comprises establishments primarily engaged in generating electric power, transmitting it from the generator to a distribution center, and providing the energy to end customers. Typically, establishments will perform only one of these major functions, although there are cases where they might be involved in all three.
• Natural Gas Distribution: This industry comprises establishments primarily engaged in operating gas distribution systems (e.g., mains, meters); marketers that buy gas from the well and sell it to a distribution system; brokers or agents that arrange the sale of gas over gas distribution systems operated by others; and establishments primarily engaged in transmitting and distributing gas to final consumers.
• Water, Sewage and Other Systems: This category is broken up into three classifications under NAICS:

- Water Supply and Irrigation Systems: This industry comprises establishments primarily engaged in operating water treatment plants and/or operating water supply systems. The water supply system may include pumping stations, aqueducts, and/or distribution mains. The water may be used for drinking, irrigation, or other uses.

- Sewage Treatment Facilities: This industry comprises establishments primarily engaged in operating sewer systems or sewage treatment facilities that collect, treat, and dispose of waste.

- Steam and Air Conditioning Supply: This industry comprises establishments primarily engaged in providing steam, heated air, or cooled air. The steam may be distributed through mains or ducts.

The Inclination to Outsource

One way for companies to stabilize and improve key business metrics is by outsourcing certain document-related functions (e.g., internal and external print, mail, records management, business communications) to service partners that can help control costs and improve operational efficiencies. InfoTrends has found that 58% of telecommunications/utilities companies are currently outsourcing some document services. The legal and insurance industries are the only sectors with a higher propensity to do so. This means that telecom/utilities companies are prime vertical markets for PSPs and MSPs to focus on. This is also a case where size does not matter—there is little difference in the tendency to outsource based on company size. The outsourcing of off-site printing and document services is by far the most common, with nearly half of respondents indicating that they take advantage of these services.

The preceding is an excerpt from a report entitled Opportunities in the Telecommunications and Utilities Markets. To learn more about this report, visit our online store or contact Robyn Wuori at ext. 103 or e-mail .