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Telecommunications today
Government deregulation, network convergence, globalization and the Internet have opened the doors to new competition and collaborative possibilities that are reshaping the telecommunications industry. Operators are faced with multiple challenges including lean Internet-based competitors offering innovative new services.
The rise of Internet players
In terms of revenues, major telecom operators still outperform major players in the Internet domain. The combined revenues of the four biggest telecom operators were approximately three times the combined revenues of the four largest Internet companies. However, Internet companies far outperform telecom operators in terms of market capital (figure 1). This reflects the market's low expectations for growth in the telecom industry.
Convergence to the Internet
Internet service providers are directly competing with operators by providing low-cost voice services online. Moreover, consumers are gradually spending more time on web-based communication services, such as blogs and social networking sites, and less time on conventional voice communications. Growth of the Internet is also creating new synergies. There is an accelerating shift towards more open, collaborative communication models that pull players from other industries into the traditional telecom realm.
Competition from other industries
The emergence of strong competitors and new business models from other industries is part of a wave of change that is altering the nature of service provision in the telecom industry. Rather than focusing on technology, operators need to review their business operations and shift their focus to service delivery that is simple, flexible and customer centric.
In response to these rising challenges in the telecommunications industry, many operators have begun the process of total transformation. At NEC and ABeam Consulting, we can help operators transform effectively through our advanced transformation services.
