What is a Telecommunications Service Provider?

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  • Written By: Carol Francois
  • Edited By: Heather Bailey
  • Last Modified Date: 09 December 2019
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A telecommunications service provider is a company that has the equipment, software, and staff required to support telephone and related communication services. The term originally included only land lines, or standard telephone connections. In the past 15 years, it has expanded to include cellular phones, satellite phones, and wireless connection to the Internet. This expansion has occurred fairly rapidly, resulting in increased costs and equipment expenses for this type of firm.

It is important to note that a telecommunications service provider does not include cable or satellite television companies, cable Internet connections or managed service providers. The initial infrastructure costs required to enter this industry are prohibitive, and have resulted in a significant investment or ownership by the government. In the United States, Canada, and parts of Europe, this role has been reduced over the years, so that the vast majority of these firms are now privately owned and operated. However, in other nations, government-owned telecommunication continues to be the norm.


The typical telecommunications service provider divides its business into two primary consumer groups: commercial and personal. For the commercial sector, there is a huge interest in telephone management software and systems. There are two models available: multiple direct lines or business extensions. The direct line model is suitable in very large organizations or firms that have limited central administrative support staff. Extensions are best utilized in mid-sized firms that have a central receptionist or related role. This person is responsible for providing operator related services and directing calls as required.

In the personal communication market, the services offered are focused on easy to use functions. This includes digital voice mail, caller identification, call return, multi-party or conference calls, and call forwarding. Each of these services are provided for an additional fee, allowing telecommunications service providers to increase the revenue stream without a huge investment in technology.

There is a growth in demand for cellular phone services, as more and more people see the value in being able to communicate from a wider range of locations. As this product market expands, telecommunications service provider firms are investing more money into cellular transmission towers, improving service and coverage area. In North America and Asia, many people in the 20- to 30-year-old age group are using their cellular phone as their only phone line, and ending their land line phone accounts. This trend is expected to grow as the number of towers increases. As a result, telecommunication firms are expanding products and functionality on their cellular phone products to capitalize on this segment of the market.


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