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The Future Bases For Competitive Advantage in the Telecommunications Industry

Over the past decade, the communications industry has changed dramatically due to deregulation, technological changes, increasing convergence of previously unrelated services and, more recently, rapid advancements in Internet, broadband and wireless technologies.

The global telecommunications market went through a fundamental transition from national state owned monopolies to privatised, deregulated competitive markets. Simultaneously, the new technologies made possible new, innovative services, created new markets and reduced the barriers to entry. Together deregulation, competition and new technology created strong downwards pressures in prices. In essence, there was a new paradigm - a significant change in the balance between Porter’s Five Forces, producing a high degree of dynamism and complexity in the telecommunications industry. Together this created one of the largest ‘booms’ of modern times and utterly transformed the telecom landscape by introducing a host of new players.

This dissertation evaluates the hypothesis that successful operators will meet customer needs through solutions and services not technology and that key success factors will include speed, flexibility and outstanding quality and reliability. The purpose of the dissertation is (a) to make sense of the forces driving change in the telecom industry and (b) identify future areas of opportunity for industry players and the key success factors that will be necessary to enable them to compete. Primary data was collected through customer questionnaires and interviews with managers associated with the companies that were the subject of the case studies. Secondary data was collected from sources such as relevant literature, trade, business and academic journals, informal discussions, market research, the media and the internet. The current position and strategies of Vodafone and Cable & Wireless were examined with a view to determining how they intend to best meet market demands – and develop sources of competitive advantage. The fieldwork and case studies were compared in Section 6 with the theoretical framework derived from the literature review and conclusions drawn about the validity or otherwise of the hypothesis. The hypothesis was considered proven.

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