Telecommunications industry analysis

TELECOMMUNICATIONS INDUSTRY ANALYSIS

The telecommunications industry plays an important role in the society because of its social and economic impact. The companies within this industry have toevolve quickly by innovating, searching and developing new technologies. They have to constantly change to fulfill the needs of its customers. There are some features that allow those changes anddirectly influence the competition and profitability of the companies of this industry.

Products and services from the telecommunications industries have serious substitution threats, for example,internet telephony could take some market share of telecom companies; one way to battle these threats is by the convergence of technologies as well as the merger and acquisitions of companies . Thesealternatives bring a huge quantity of new opportunities in the market, add brand value and help to fulfill the requirements of the customers. It does not mean the decrease competition, but it opens themarket and force the companies to be proactive and always look for new opportunities. This also influences the profitability of the companies, if they stay in the traditional market their revenue willtend to decline, so they have to invest for the future. Although, Mergers and acquisitions can also have some negative effects, as the monopolization of the telecommunication products and services andunemployment, every country should have appropriate steps to control these problems.

The deregulation has also played a big part in the evolution of the industry. This deregulation brought changes tothe business strategies by addressing the challenges in the competitive market, offering better service at a lower rate, among others, this caused that the competition, innovation and investment inthe sector increased.

Another important feature is the innovation. Customers’ demands for new services and lower cost services are forcing telecommunications service providers to increase their...