Market Growth

The market for IXC communications is becoming more competitive through the introduction of more efficient technologies and lower barriers to entry for new carriers. Although the total usage of IXC communication is increasing, the average revenue pre minute is decreasing. As a result, the total industry revenue for the IXC market is decreasing.

Figure 1 shows the growth in number of inter-exchange carriers in the United States. This diagram shows that the deregulation of the telecommunications industry and advances in cost effective technology have increased the number of interexchange carriers from less than 80 in 1993 to more than 200 in 2000.


Figure 1: Number of IXC Carriers in the United States.

Figure 2 shows the decline in IXC revenue in the United States starting in 2000. This diagram shows that total IXC revenues in the United States increased over 6% per year from 1985 through 1995. Since 1996, revenue of the IXC market has been decreasing and total revenues for 2000 was only $108 billion, less than revenue in 1999. This decrease in revenue has occurred despite a sharp increase in the amount of IXC network usage from 1996 through 2000.


Figure 2: United States Inter-Exchange Market Growth