Industry Analysis of Telecom Industry

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Chapter 1
Industry Background

A. Definition of the Industry: What are its Products or Services?

1. Definition

The development of any country completely depends upon the growth of telecommunications; it is a technology of transmitting signal through a long distance for the sake of communicating with each other. Throughout the world, telecom industry is being controlled by private companies instead of government monopolies. Traditional telecom technologies are also being replaced by modern wireless technologies, specifically in case of mobile services. One of the major objectives of telecom industry is to enhance the quality and speed of Internet technology.

These days, telecom industry is more concerned with texts and images (Internet technologies), rather than voice (telephone service). Most of the research works are going on Internet accessibility, specifically on data applications and broadband services. The other major division of telecom industry is mobile network sector, where lots of innovative research works are going on. Previously the traditional telephone calls used to earn the maximum revenues, but these days mobile service is going to replace traditional telephone services.

The telecommunication industry is more than just telephone services. In addition to the transmission of information this group also covers activities which offer access to a certain networks including the internet. It includes the distribution of sound, images, data or other information via cables, broadcasting, relay or satellite networks. It encompasses telephone, telegraph and telex communication, the transmission of radio and television programs, internet access provision and the maintenance of networks.

2. Goods and services

The telecommunications industry delivers telephone, television, Internet, and other services to customers throughout the Philippines. Providing the primary means of communication to virtually all businesses, households, and individuals, telecommunications firms supply an essential service to the Philippine economy. In addition to offering traditional services such as wired phone and cable TV, telecommunications companies also offer services such as cellular phone, broadband and mobile Internet, and satellite TV, among others.

B. Brief History: How did it all start? By whom? When?

The telecommunication deregulation thru the enactment of the Public Telecommunications Policy Act of 1995 as spearheaded by then President Fidel V. Ramos, gave players such as SMART, Globe and PILTEL (Pilipino Telephone Corporation) the opportunity to slug it out with Philippine Long Distance Telephone Company, which monopolized the telecommunications industry. With the advent of cellular technology coming in two competing standards—GSM (European) and CDMA (American) standard, further wrested the monopoly from PLDT which was then purely a fixed wire line provider. SMART and Globe adopted GSM technology to provide mobile voice services while PILTEL chose CDMA. By the year 1997, it was clear that GSM was going to be the de facto standard of mobile telecommunications thus SMART and Globe became the dominant players, PILTEL had become stagnant and unable to grow with the same degree as with SMART and Globe, thus being acquired by SMART eventually.

With the uptake on Internet usage in the country, telecom providers limited only to providing voice services diversified their offering to broadband thus they became Internet Service Providers (ISP’s) at the same time. It was envisioned that the succeeding technology of 2G GSM which was 3G technology could meet the broadband needs, however due to technological limitations (speed limit of 3G) and the lack of a killer application, like the SMS/text, the mass adoption of 3G, is really slow prompting providers to have a “wait-and-see attitude”, that is, they continue experimenting with different technologies coupled with different selling plans.

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