Frost & Sullivan: DA Market Tops $881 Million

Despite many challenges, the North American wholesale directory assistance (DA) services market is likely to see stable growth over the forecast period. New voice service providers and emerging alternative business models such as toll-free DA are likely to keep this market reasonably profitable, particularly for established incumbents and smaller niche participants. However, serious contenders in this market need to constantly monitor the changing trends in the retail as well as wholesale DA segments in order to successfully compete in this transforming legacy services market.

New analysis from Frost & Sullivan, North American Wholesale Directory Assistance Services Market, reveals that revenues in this market totaled $881.4 million in 2006 and is likely to keep increasing incrementally for the next few years.

"The North American wholesale DA services market is getting renewed impetus, particularly from the emergence of non-traditional voice service providers such as cable multiple system operators (MSOs), voice over Internet protocol (VoIP) providers, mobile virtual network operator (MVNOs), VoIP resellers and toll-free DA providers," notes Frost & Sullivan industry analyst Piyush Arora. "In addition, many of the traditional service providers including the incumbent local exchange carriers (ILECs), competitive local exchange carriers (CLECs) and regional telcos, are focusing on outsourcing non-core services such as DA, which is also creating growth opportunities for the DA wholesalers."

Moreover, demand for telephonic DA is likely to remain strong in the foreseeable future, and mediums such as wireless and SMS-based DA will also continue to grow in usage, increasing revenue opportunities for participants in the wholesale DA market. The leading DA wholesalers are striving to make telephone a ubiquitous medium for information dissemination, which would take the market for DA services from the simplistic phone number/address listing provision to a much richer source of information. In the short-term, the renewed focus on outsourcing non-core services and adoption of automation technologies such as interactive voice recognition (IVR) will generate enough business reasons for service providers to offload DA to the wholesale specialists.

However, the wholesale DA market faces manifold challenges and controlling capital and operational expenditures (CAPEX and OPEX), while ensuring that the DA product continues to evolve into an attractive alternative to the free mediums such as online/Internet and print media, is a primary concern for DA wholesalers.

"Online/Internet DA sites and even business Web sites have evolved into information portals, offering a wide range of free innovative features such as driving directions, maps, local restaurant listings, movie listings, and weather forecasts," Arora says. "Furthermore, while wireless DA is still growing, 3G network standards are enabling high-speed Internet access to mobile devices as well, further threatening to erode voice-based DA services."

While adding new enhanced features are critical to retain DA callers, wholesale DA service providers also need to carefully evaluate the potential demand and usefulness of these features. Only those features that are deemed to be of high-value to callers should be added to the DA product portfolio. DA wholesalers need to keep increasing the cost efficiencies of offering DA to the retailers by investing in automation technologies such as IVR and speech- recognition.

North American Wholesale Directory Assistance Services Market is part of the Communications Services subscription. It provides an overview of the trends in the North American wholesale directory assistance services market and revenue/demand analysis of various segments (wireline and wireless DA). In addition, the study identifies the key market drivers and restraints, and discusses current and emerging trends in the North American wholesale DA market. In this research service, Frost & Sullivan's expert analysts thoroughly examine the wholesale wireline and wholesale wireless DA segment. Interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership service and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics and demographics.

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