operators to gain new revenue sources by providing extra services which have traditionally been unavailable because of local monopoly barriers. This increased competition will result in lower profit margins for all industry companies.Local Telephone Access Privileges Companies that wish to provide local telephone service face heavy barriers to entry. Construction is expensive, the process is time-consuming, and is highly regulated by the FCC.FCC's Changing Role The FCC will eventually become a market facilitator rather than a market regulator when all mergers become finalized. Vigorous competition should reduce the need for direct regulation by the FCC. INDUSTRY TRENDSWireless Data Communications. Wireless data communications will be the next battle ground for wireless phone companies. With the demand for mobile data communications such as internet services, wireless companies have redirected much of their capital expenditures towards building up their data based infrastructure. Switch from GSM to CDMA Technology. The industry is slowly shifting from Global System for Mobile Communications (GSM) to Code Division Multiple Access (CDMA). GSM remains the most widely installed system. However, CDMA is a better technology .Currently CDMA has 50 million subscribers. Pacific Rim countries (e.g. Japan, Thailand, Philippines) have chosen CDMA as their standard technology. South American countries are adopting CDMA technology as well. But GSM is widely installed in European countries such as Poland, Russia, and Finland.Industry Consolidation. The Telecommunications Act has brought about a flurry of merger activity in the industry. This metamorphosis process should continue as companies jockey for position in a growing but crowded industry. The most significant mergers in 1998 were SBC Communications $62 billion merger with Ameritech. The merger further solidifies SBC's goal of a national telephone netw...
