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Thursday, March 16, 2006

Telecoms Follows IBM's Lead

The telecom industry is just where IBM was in 1996. They have been surprised by a few upstart companies in new, yet similar, markets that are pulling away their customers. Now, they have to turn their companies around.

Lucent Worldwide Services, like the IBM of last decade, plans to start focusing more on services and providing more to the consumer in hopes of retaining their loyalty. Network Infrastructure companies are devoting themselves to services and advanced systems like the IT structures did in the past.

According to John Leigh, head of outsourcing at BT Global Services, "Every product manufacturer is attracted to services because of the recurring revenue streams on offer from annuity contracts. But what they don't always realize is that 90% of services work has a profit margin of around 6% to 9% which is well below what they make on product sales."

Learn more about this movement in the telecom industry in the article, Comms manufacturers follow IBM's lead in services (link above).

Added by Joshua Feinberg