The Telecommunications Industry .

Essay by LenkaUniversity, Bachelor'sA, May 2003

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Telecommunications market is a very complex market, which can be viewed as having two integral parts: The equipment makers, and the service providers. In this paper we will discuss the service provider sector only. This is because the competition in the equipment maker sector can be categorised as a free market, with perfect competition according to some economists. As such it is largely uninteresting for this paper. Instead, this paper will attempt to focus at the service provider market because this one is in a process of transition from the monopoly toward the oligopoly, with more than one player. This market can be seen as having three major categories: Telephone providers, wireless telephone providers, and data transmission services. This paper will discuss the following aspects to the sector of service providers: The history, its market structure, the form of prevailing mode of competition within this market, its consumers' satisfaction, recipients of supra-normal profit, governmental role, and the future of the market.

The paper will also attempt to show the 1980's and 1990's trends of market's growth, parallel liberalisation, and its exit from the monopoly.


Historically, domestic and international telecommunications were controlled in each country by the national post and telecommunications organisation (PTO). It was a monopolistic market, where a company faced no competition, made little efforts to improve its services, and to lower charges. In the 1980's the market began to restructure. First PTO's were divided into separate post, and telecommunications parts. Later on from the mid 1980's, privatisation, liberalisation, and globalisation influenced the market. By today the world's leading countries all have liberalised telecommunications markets. UK, USA, and Japan were one of the first countries, followed by such countries as Germany, France and Canada.

In the late 1980's a new service was born - the wireless...