Sections 4 and 6

Entrepreneurship:

Historically, the telecommunications industry in the recent past has been fairly one sided, mostly dominated by large companies with huge revenues. Just ten years ago it seemed that the entrepreneurial spirit was absent as there was little room for startups to enter the industry. Recently however, we have seen this fact disproved and now see potential that will be sure to increase as time goes on. The industry is currently broken into several subclasses and impacts more external industries than ever previously thought. There is further opportunity for innovation particularly when it comes to Internet and wireless technologies which all could prove to be a big challenge to the traditional providers.

First, in the Cable, Internet, and Television market, we see huge growth opportunity for those willing to challenge the status quo. Traditional key players such as Comcast, Dish Network, and Time Warner are facing mounting pressure to stay ahead of the curve thanks to Internet based video companies. Youtube has certainly skyrocketed over the past few years and gained so much appeal is was acquired by Google. With that said, the popularity of YouTube will unlikely effect the bottom line for cable providers due to copyright laws. One company that could pose a potential threat however is Hulu. Started in 2008, Hulu has teamed with several major networks included NBC, Bravo, and Beliefnet (White, 2009).This enables anyone to legally watch an episode of television on their pc or smartphone for free, all without paying that hefty fee for cable tv to a provider. While data doesn’t currently show Internet video significantly impacting bottom lines, the potential is certainly present. If, for example, Hulu and other sites were to partner with all major networks, it would make little sense to pay to watch the same shows on a television set. In today’s world most new laptops are equipped with an hdmi port which would enable you to watch your favorite show on your hdtv, not just your small computer screen, leaving the potential for there to be a world with no traditional provider. While these are still emerging technologies it will be interesting to see what happens to the major providers of these services if this technology becomes prevalent in society.

Next, one of the fastest growing segments in the telecom industry is no doubt the wireless sector. With an annual revenue of 193.6 billion dollars (IBIS World Telecommunications: Wireless, 2010), it’s easy to see why we focus so much attention on it. The biggest news in the past five years was Verizon’s acquisition of Alltel. This allowed Verizon to not only increase it market share, but also provided far more opportunity to expand infrastructure. Nearly every company has been in the process of rolling out 4G technologies, a very expensive venture. Analysts are expecting this investment to pay off in the year 2012 when hardware manufacturers and software developers take full advantage of the new bandwidth (Reisinger, 2010). Due to excessive regulation by the FCC and various other international organizations, this segment often requires innovation in the form of intrepreneurs. Apple for example has gone above and beyond most other companies to harness the power of 4G technology. Their new facetime technology incorporated in the iPhone 4 allows users to have a live video chat anywhere they receive a cell phone signal. In the United States AT&T has restricted it to WiFi only, a move to limit network traffic in fragile geographical locations. Despite this, the technological capability is still present.

The future appears very promising for the industry in terms of innovation. Though these are only few examples, others successes such as Google’s Android software, Clear’s Mobile 4G, and OnDemand video are all emerging technologies that will have a direct impact on the industry’s future. The ever-growing competitive landscape of the industry will force large companies to innovate or change pricing strategies to keep up with emerging competition despite the regulatory issues that prevent conventional entrepreneurs from entering the market.

Telecommunications: Wireless. (2010). Ibis world. Retrieved October 12, 2010, from http://www.ibisworld.com/industryus/default.aspx?indid=1267

Cable Internet and Television. (2010). Ibis world. Retrieved October 12, 2010, from http://www.ibisworld.com/industryus/ataglance.aspx?indid=1264

White, B. (2009, April 30). Hulu becomes 3rd largest video website. Retrieved from http://www.bloggingstocks.com/2009/04/30/nbc-news-corp-s-hulu-becomes-third-largest-video-website-in-mar/

Reisinger, D. (2010, October 12). Mobile video calling to hit 29 millions users by 2015. Retrieved from http://news.cnet.com/8301-13506_3-20019298-17.html

Technology:

In the telecommunications industry the role of technology is particularly interesting. Emerging trends in the wireless sector, such as 4g, in addition to those in the wire-line segment, all come together to complete the whole picture. When analyzed on a macro level, the influence of technology provides great explanations for overall trends in the industry including globalization, shifts in the supply chain, as well as a revolution in customer service.

In the past, many large telecom companies had a clearly focused and defined goal, one that was handled internally. In the past few decades however, the amount of competition in the industry has forced companies to outsource many of the tasks they once were solely responsible for. A typical supply chain for a large company in the industry would be similar to this: infrastructure services, infrastructure operators, access providers, service integrators, and application developers (Ellsworth 2002). Not all companies are structured in the same manor but all have become quite complex, thus creating the need for outsourcing. There are now companies that specialize in each and every one of the areas described in the supply chain process, firms that are looked upon by giants such as AT&T and Verizon to help implement their services regionally.

Bandwave Systems LLC is a company that works with clients across the country to deliver telecommunication services of all kinds to small and medium sized businesses. Although outsourcing and off shoring customer service positions to places like India seem all too common, my conversation with Mr. Zaidi revealed something I felt was often overlooked. In a company of only ten individuals, they are able to provide support well after the original implementation, without ever having to leave their office. New trends such as GoToMeeting and other related services, some even created by those in the telecom industry, prove vital for their business operations. Going even further, he explained to me that they had partnerships with all of the major service providers in the nation to gain exclusive access to their internal system in order to provide assistance to customers. This means that someone in New Jersey could assist a client in San Diego by simply accessing Cox Communication’s portal system. This revolution provides unprecedented support that doesn’t require you to ship any jobs overseas, keeping jobs here and in theory providing a more personal support experience.

Companies in the telecom industry are no doubt using the global stage to reduce production costs. Many of the raw materials needed for infrastructure obviously comes from overseas in addition to the creation of jobs needed to support the development of services abroad. We often overlook new innovations, such as remote access, that help not only the service provider but also these smaller firms that are essential to the overall process. The rapidly developing nature of the industry makes highlighting these new technological aspects essential. People always want the next best thing and it is up to the industry to respond to those needs which, more times than not rest solely on technological development.

Sources

Ellsworth, M. (2002). Impact on the Telecom Supply Chain. Stratvantage Consulting. Retrieved November 9, 2010, from http://www.stratvantage.com/opinion/telecomexcerpt.pdf

Politowski, J. (2010). [Interview with Adhil Zaidi, Director of Organizational Mangement]. Bandwave Systems LLC