Data Bases • Custom Term Papers • Free Term Papers • Free Research Papers • Free Essays • Free Book Reports • Plagiarism? Links • Top 100 Term Paper Sites • Top 25 Essay Sites • Top 50 Essay Sites • Search 97,000 Papers @ DirectEssays.com • Search 101,000 Papers @ ExampleEssays.com • Search 90,000 Papers @ MegaEssays.com Free Essays • Term Paper Sites • Chuck III's Free Essays • Free College Essays • TermPaperSites.com • My Term Papers • Get Free Essays • Essay World • Planet Papers	Search Lots of Essays Back to Subjects - Technology Telecommunication Telecommunication "Technical advancement in the field of Telecommunication" The move into the Information Society is driven by the market for new information and communications technologies and services. Whilst the large number of technologies and services and their providers bring expectations of higher economic growth, there has been a growing concern about the social, ethical, cultural, political and economic aspects of the coming society. For some time there has been a considerable interest in the prospects of obtaining a "sustainable development" through the use of telecommunication technologies. The generally accepted definition of sustainable development is that "current generations should meet their needs without compromising the ability of future generations to meet their own needs". Whereas the term sustainability has most often been used when referring to the environment, Industry wide restructuring is Inevitable. Major telecommunication service providers such as AT& T and WorldCom are responding to a major business model shift. The problem is weak long distance revenues, falling market, share, reduced profits, and lack of strategic direction. The long distance business is largely a commodity business that does not have the strategic growth capability. Deregulation has damaged this product segment for the major carriers because it allows Regional Bell Companies (RBC) to offer long distance services to regional customers and bypass traditional long distance providers. But competition also comes from Independent Local Exchange Carriers (ILEC) which is subject to far less stringent regulatory hurdles and requirements. ILEC's have launched successful long distance service campaigns after AT&T and WorldCom customers. ILEC's such as Alltel Corp. has 1.1 million customers while CenturyTel has 330,000 long distance customers. Wireless Communications: Explosive Growth. Explosive growth of wireless communications technology continues as the industry experiences new subscribers and lower prices for services. The U.S. market had 100 million wireless subscribers in year 2000, a 16.2 percent rise from 1999 of 86 million. In 1993, there were only 16 million wireless subscribers, a rise of 525 percent rise in subscribers over 7 years. Market penetration rose 33 percent in 2000. In 1993, market penetration was only 6 percent. The explosive growth can largely be attributed to intensive competition which forces prices down and increase cellular phone usage. In fact, the market for wireless voice services is becoming mature. Growth rates and heavy competition are restricting profit margins. The U.S. telecommunications services industry will continue to expand in 2001. The popularity of wireless phones has increased the demand for wireless cellular telephone service and reduced the demand for in-building wired phones. Approximately 50 percent of the population has access to a wireless phone. With increased usage of wireless phones, the cost structure should be affordable to the greater population. Cellular phone growth has fueled expansion of network infrastructure expansion as well. In mid-2000, there were 95,753 cellular sites. In 1999, there were 74,157 cellular sites. This is year-to-year increase of 29 percent. The wireless industry is constantly evolving the current growth reflects an ongoing shift to new technology of digital personal communication services (PCS). The industry is also pooling its resources to create a national network. Regional companies need greater coverage to compete with one-rate plans offered by AT&T wireless and Sprint PCS. It is more cost effective to join forces than to start a company's wireless operations from scratch. Furthermore, speed-to-market is a key competitive element. Voicestream, Verizon Wireless, and Cingular Wireless all became national players in year 2000. These companies will be very competitive with AT&T's One-Rate Plan and Sprint. Wireless Phone Industry: Competition Heats Up. The wireless industry is virtually an oligopoly. The wireless phone business is primarily dominated by three major firms which consist of AT& T Wireless, Sprint PCs Group, and Nextel. The field recently expanded with the addition of Verizon Wireless and Cingular Wireless. Verizon Wireless is an alliance of Bell Atlantic and Vodafone Air Touch plc. Verizon Wireless (created in April 2000) is now the largest wireless provider with 16 million voce/data customers and 4 million paging customers. Cingular Wireless is a national wireless joint venture launched in October 2000 with revenues of $12 billion. Cingular serves 19 million customers and 190 potential customers across 38 states. Cingular Wireless serves 42 of the nation's top 50 markets but is less comprehensive coverage than AT&T and Verizon Wireless. In May 2000, AT&T sold 360 million shares in AT&T Wireless at an initial IPO price of $29.50 which raised $10.62 billion. These funds will likely be used for expanding their cellular phone network and building infrastructure into data retrieval services. Cellular Pricing Competition Heats Up. The business is heavily concentrating its efforts on offering consumers service at a variety of price points. AT&T launched One Rate Plan in mid-1998.Market penetration and affordability will lower prices and thus, attract more users. Per minute voice calls continue to fall. Speed to market is becoming increasingly important as is brand name. Companies must pool resources together to build national networks. It would be to time and cost ineffective to build their own national networks. Consumers are increasingly demanding more new features with their cellular phone service. Many consumers now request data retrieval functionality. Some cellular phone companies have responded by increasing their capital spending budgets on data-based infrastructure equipment to build up brand preference. Consolidation Continues in Wire line Business. The U.S. telecommunications services industry, which serves more than 90 million households and 25 million businesses nationwide. The industry is broadly divided into providers serving the communications markets for local exchange, long distance (toll), international, cellular and mobile radio, satellite, and data communications, including value-added network services (VANs). More than 2,000 companies employing about 875,000 persons that serve these markets are both regulated common carriers and unregulated private network providers. http://www.ers.usda.gov/briefing/Infrastructure/InfrastructureTelecommunications.htm The telecommunications industry has witnessed a flurry of merger activity as companies rush to position themselves in a rapidly changing marketplace. The Telecommunications Act of 1996 set the stage for enhanced competition. This act enables large companies to become end-to-end providers of telecommunication services that cover the entire U.S. and world. Its important for these companies to find a merger partner because of the high cost of establishing new territories. Further, there are significant barriers to entry for local telecommunication services. Most telephone companies are consolidating to offer and bundle disparate services together. AT&T Sets Strategic Partnership with Time Warner. In February 1999, AT&T announced an aggressive plan to become the dominant telecommunications company in the world by partnering with Time Warner's cable service to provide local telephone access to consumers. The partnering deal will allow AT&T to provide at least 40% of U.S. households with the local telephone service. The deal will invariably put more pressure on local and regional bell operating companies to partner with other companies to block further inroads by AT& T into the lucrative local phone market. AT&T Acquires TCI Cable. AT&T acquired TCI cable to address their need to entering the local telephone service market once again. In addition, the purchase gives AT&T better access to provide internet services to consumers because TCI Cable owns a part of @Home, Inc, a provider of fast internet connections into the home through cable modems. Long Distance Telephone Business Perks Up. Revenue growth averaged 10.3% for the top three long distance providers. This can be attributed to increased industry consolidation, fewer promotional deals, and enhanced services. FCC continues to analyze the GTE/ Bell Atlantic merger. A decision should be made by the end of year 2000. The key issue with this merger is apparently how it could reduce competition within the north Atlantic region. It's believed this merger has many overlapping pitfalls for consumers. The FCC canceled the MCI WorldCom/ Sprint merger which would have created an extremely dominate internet data network and cellular phone network throughout the world. This merger would have put the combined company in the two fastest growing sectors of the telecommunications services industry. The main issue was market dominance. WorldCom is the premiere provider of end-to-end communications in the U.S.while Sprint is the third largest long distance company and the leading wireless provider in the U.S. The telecommunications services industry faces many issues concerning regulation and competition in the domestic market. The FCC must rule local Bell Operating Companies (BOC) access fee charges to long distance companies. Though access fee rates have come down significantly over the years, long distance companies are still at a competitive disadvantage. The Telecommunications Act of 1996 allows local telecommunication companies, long distance, and cable TV operators to enter each others markets. This act enables these 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. 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. 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. 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. 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 network to offer increased voice and data services. Another significant deal was the $53 billion merger between Bell Atlantic and GTE. Pending approval, this merger will provide substantial economies of scale in providing voice and data services in their respective regions of service. Bundling Telecommunication Services. The passage of the Telecommunications Act of 1996 will allow companies to offer "one-stop" shopping of telecommunication services by consumers and business. Since operators can enter each others business, bundled services can include local, long distance, wireless, internet, and cable TV services. These companies may also segment their markets to offer enhanced services to loyal customers. Telecos operators may even use some form of price discrimination by offering multiple "service packages" to different market segments. This strategy is based on simplified billing to customers which reduces the telecos providers overall cost. Teleco operators who are not "full service" providers could be at a substantial disadvantage. However, there will always be niche players that serve a particular geographic area, customer, or market segment. Wireless Technology used in Global Markets. Global penetration of wireless technology should assist growing economies in developing their telecommunications infrastructure. Wireless technology is likely to replace wire line networks because of the portability of voice and data. http://www.ers.usda.gov/briefing/Infrastructure/InfrastructureTelecommunications.htm Direct Selling of Wireless Services. Companies are setting up their own distribution channels to sell equipment and services to consumers. This is an expensive proposition but gives those direct sellers more exclusivity with the search-sale-service-support process to consumers. Other cellular service providers are using independent retail stores to sell such equipment and services. This can include agents, resellers, electronic stores, and even telemarketing. With the industry growing so fast, it may make sense to use multiple distribution channels. http://tap.gallaudet.edu/hatfield.htm The World Trade Organization (WTO) adopted an agreement to open markets in February 1997 which were previously state-run monopolies. This agreement was implemented in February 1998. Overseas revenues are derived primarily from basic voice services. U.S. Telecos companies are looking overseas for additional growth since the U.S. market is slow-growing. Korea and China have good potential for substantial growth. Korea has two cellular companies that used CDMA technology and then added three companies that used PCS companies. China has relied on outdated GSM technology. GSM technology is less efficient because it cannot handle both voice and data. CDMA is a better technology for these types of applications. Japan uses CDMA technology and has not fully embraced PCS technology. To have a growing economy, a telecommunications infrastructure is a must. This is why we expect tremendous growth in the Pacific Rim region relative to the rest of the world. A telecommunications infrastructure is needed for stock market activity, mass media, and production/manufacturing activity to handle data and voice systems. The Federal Communications Commission (FCC) regulates interstate common carrier communications, and individual state public utility commissions (PUCs) regulate communications within their jurisdictions. The FCC also regulates the use of radio frequencies by the U.S. telecommunications (telecom) industry through a system of spectrum allocation and licensing. Since the breakup of AT&T in 1984, the U.S. common carrier network has been divided into 161 local access transport areas (LATAs). Communications among LATAs are handled by long distance carriers, although intra-LATA telecommunications (both local and toll calling) are the responsibility of the local exchange carriers (LECs). Private telecommunications networks, which serve only specific customers rather than offering services to the public at large, are not regulated as common carriers. Since most U.S. long distance carriers are judged not to possess market power, they are not subject to FCC regulation. The largest company, AT&T, is subject to price-cap regulation, and in some business markets, where the FCC has determined that AT&T lacks market power, its services are subject to streamlined regulation under which its tariffs are presumed lawful and need not be justified by cost support materials. The FCC allows unlimited resale of long distance facilities and services, although the degree of intrastate resale competition varies from state to state. Local telephone services are provided by about 1,325 local telephone companies (telcos), including 22 local Bell Operating Companies (BOCs), telcos owned by GTE, Sprint (United Telecom and Centel franchises), and independent local telephone companies. Many of these small, local companies operate as rural telephone cooperatives. Long distance service is provided by AT&T, MCI, Sprint, WilTel, Metro media Communications, Litel Telecommunications, Allnet, and more than 475 smaller carriers. http://www.isoc.org/HMP/PLENARY/L1-6/html/paper.html Telephone service continues to be a valuable and cost-effective service for American consumers and businesses. During the last several years, local service rates have been increasing at a slower rate than overall inflation. During 1992, the consumer price index (CPI) rose 2.9 percent for all goods and services. By contrast, the CPI for local services rose 0.5 percent, while the CPI for intrastate toll services declined 2.4 percent and interstate toll services declined 1.3 percent. As of late 1992, average monthly residential rates for a single party access line were $13.08, an amount only 50 cents higher than the average 6 years earlier. Even adding increases for access charges and taxes, the total average monthly cost of touch tone service increased only $2 between 1986 and 1992. According to a recent survey, average monthly household expenditures for telephone service totaled $55.10 in 1991, of which about one-half was for toll services and nearly 20 percent for discretionary services (such as touch tone calling, call waiting, directory listing charges, etc.), or additional local lines and cellular service. Business customers pay a significantly higher local rate than residential customers, about $42 in total monthly charges for a single telephone line, compared with an average rate for a home telephone line of less than $20. In the United States, 2.1 percent of annual household expenditures nationwide went for telephone service, but research has indicated there is a strong relationship between income and telephone expenditures. Many states have "lifeline" programs that help promote universal telephone service by subsidizing monthly service charges for the poor. Thus, basic local service is available to needy households for an average price of less than $11 per month. Data for 1997 show that 93.9 percent of U.S. households have telephone service. Since 1984, domestic interstate long distance charges have dropped 31 percent while the CPI for the same period rose 35 percent. The nine-year trend of overall declining prices for long distance service was halted in July 1993 when AT&T filed for overall long distance rate increases of 1.2 percent valued at nearly $500 million. MCI and Sprint also raised their prices slightly. Such small increases should not slow down the continuing 5 percent annual growth in residential toll traffic. Declining prices have also characterized international communications. U.S. billed revenue per minute was $1.34 in 1980, but only $1.01 in 1991. However, revenue totals continue to grow impressively, with international billed revenues exceeding $13 billion in 1993. Telephone traffic accounts for more than 90 percent of billed revenue per minute. Growth in international telecommunications traffic and revenues continues to increase at a faster pace than in the domestic market. Telephone traffic volume generally moves in rhythm with the nation's economic pulse, so that improvement in the U.S. economy in 1994 should help stimulate increases in long distance and international calls. Long distance networks now are nearly 100 percent fiber, although the carriers utilize satellite and microwave circuits for backup and special facilities applications. Both local and long distance carriers are either investing in or evaluating applications using digital technologies for wireless communications networks, including point-to-point microwave links and wireless access technologies such as cellular. Local markets are ruled by the Bell operating companies which are subsidiaries of the five baby bells. The wireless telecommunications industry is comprised of both analog and digital providers of wireless services. The wireless segment is growing at about 20% per year. The main industry participants are also many of the same companies that provide wire line services to consumers and business. Wireless participants are cellular wireless providers and broadband personal communications services (PCS) providers which operate networks based on a system of geographic cells and enhanced specialized mobile radio (ESMR) operators which concentrate their channels on dispatch services. http://tap.gallaudet.edu/hatfield.htm Social and economical impacts of telecommunication services A number of efforts addressing the social and economic consequences of new information and communication services are underway, including work within governmental bodies such as the Information Society Forum for "making the most of the Information Society in the European Union" and academic bodies such as MIT which put focus on human values when "Inventing the organizations for the 21st Century". An overview of these efforts will suit as a good starting point for a more specific investigation of these consequences from the perspective of PNOs and/or telecommunication service providers. The scope of the more specific investigations will include consequences telecommunication services may cause for: employment and job creation; demography; quality of work life; social and democratic values; "fragmentation" and "balkanisation"; sustainable development; public administrations and services, culture, and; life-long learning. Upcoming projects in this area will in addition increase individual and societal awareness, inform service providers about constraints and effects for the economical and social spheres. This will stimulate a reconsideration of certain developments to change the course in such a way that advantages and drawbacks may be better balanced or re-balanced and absolute negative effects might be avoided. Broader studies in the socio-economic area will discover and reveal both the attractive and the problematic aspects and negative effects of telecommunication services in the Information Society. An objective will be to consider whether or not certain products and services conceptually planned and foreseen to be pushed into the market, should be amended for achieving a better societal and individual (customer-related) fit for their harmonious and smooth introduction and diffusion in the market. With this latter goal the proposed exploration of societal conditions and constraints, effects and problems has a clear commercial dimension since any conditions which may create barriers for the acceptance of products and services are counter-productive to business. We believe that the choices our society makes in the next decade will have a dramatic effect on which of the possible changes actually occur in the decades afterwards. EURESCOM projects within this area will contribute knowledge to help us make these choices wisely, based on careful thought about the values that are important to us and the kind of world in which we would like our children to live Bibliography: Works cited http://www.isoc.org/HMP/PLENARY/L1-6/html/paper.html http://www.ers.usda.gov/briefing/Infrastructure/InfrastructureTelecommunications.htm http://tap.gallaudet.edu/hatfield.htm Word Count: 3449
Copyright © 1998-2008 College Term Papers, INC All Rights Reserved. DMCA Notifications and Requests