Introduction to Telecommunications Industries

Introduction

The various industries that are the focus of our telecommunications profile historically provided four distinct consumer-facing products -- home telephony, mobile telephony, television, and internet access. But these historical divisions are disappearing. Cable and telephone companies now compete directly to provide the dominant "triple play": a high bandwidth, general purpose pipe to the home used to sell vertically-integrated voice and video services, along with data transmission to the public internet. Cell phone companies are also racing to become broadband providers, with data rapidly overtaking voice as the dominant source of revenue in the industry. Their product remains different from home broadband because it offers ubiquitous access, at the price of lower overall bandwidth. Most analysts assume that the mobile and residential segments will therefore remain distinct and complementary, because consumers will want both ubiquity and speed. Still, even the boundaries between mobile and home service are beginning to blur as consumer devices increasingly roam freely between cellular wireless networks and home "wifi" networks, at the same time as wifi and cellular technology themselves evolve closer together: wifi is constantly becoming more ubiquitous, and cellular is constantly pushing bandwidth limitations. The figures below demonstrate these pervasive, revolutionary transformations ongoing in the industry.

[insert: market share for voice] [insert: market share for video] [insert: market share for broadband internet] [insert: revenue by service over time for Comcast] [insert: revenue by service over time for Verizon] [insert: mobile ARPU for voice and data]

Technically, the various providers of new broadband services all offer some variation on the same very general network design. Fiber optic lines--by far the dominant telecommunications technology--form the high bandwidth core of any modern network. These lines may run all the way to the end-user's access device, or their reach may be extended by other wired and wireless technologies. In particular many residential broadband networks make use of legacy telephone or cable wires to carry the "last mile" communications. These networks are often extended with the home with wifi routers: low power customer-owned wireless equipment operating on open frequencies. Commercial wireless networks are not technically all that different, except that they operate at much high power, and on frequencies where the operator has purchased an exclusive license to broadcast from the federal government. The figures below illustrate both this general network design, and its variations in various network implementations.

[insert: basic network design schematic] [insert: FTTN VDSL Network (e.g. AT&T U-Verse)] [insert: Cable Network (e.g. Comcast)] [insert: FTTH Network (e.g. Verizon FiOS)] [insert: Cellular Network]

Research Questions From Methodology

Addressed in This Overview

• How was this field born and how is it evolving?
• What are the main business models?

Not Yet Addressed

• What are the innovation dynamics in this field? (inputs/outputs, timing of innovation/ disruptive or incremental innovation?)
• How does knowledge flow in this field?
• Is this field replicating models from other fields?
• How many companies?
• How much money do they make or how much money do they “move” in the American economy?
• How important is research from universities in this specific field?
• How important is public funding in this field?
• How important is private funding / venture capital in this field?
• Are there any specific public policies (from agencies, federal or state policies) that give incentives for openness or enclosure?
• What is the cost structure of the field?
• Who are the producers, the buyers, and the users?
• What is the structure of power from the production side and what is the structure of power in the demand side? E.g., who has the power to control production and demand? How is the control distributed?