The telecommunications sector is an important strategic segment of the modern economy. As globalization has paved the way, the telecommunications industry has gradually become a more global industry with increasing competition. The first factor that shaped the telecommunications industry into what it is today is globalization. The telecommunications industry transports information at such incredible speeds that the concept of a virtual world has become a reality. This article will discuss the impact of globalization and the risks and opportunities it presents to the industry.
The first factor that shaped the telecommunications industry into what it is today is globalization. The telecommunications industry transports information at such incredible speeds that the concept of a virtual world has become a reality. Users can stay connected globally without traveling and can collaborate in a virtual world thanks to the telecommunications industry. Telecommunications have become extremely important to the smooth running of almost every organization in the world, large or small, in the public and private sectors, and for most cross-border organizations it forms the backbone of their business. Discussions of globalization, the Internet, and e-commerce generally focus on the increasing pace of change taking place today.
The traditional distinction between local and long distance telephone service, as well as the demarcation between voice, recording, data and video services, is rapidly disappearing. The Internet has reached a third of the world’s population. There are 5 billion wireless subscribers who continue to grow at a rapid rate. Comparable changes are taking place on the international scene as the conventional separation between local, national and global communications is eroded and the use of telecommunications easily transcends national borders.
International communications is the fastest growing segment of the entire communications industry. It is estimated that global traffic would appear to reflect the same type of usage concentration that exists in long-distance domestic traffic, in which 20% of business customers account for 80% of business revenue. Global telecommunications will have a significant impact on the growth rates of industrialized and developing countries.
Many telecom providers have strong incentives to expand their operations across countries. By expanding internationally, they can leverage core skills in a broader set of opportunities, as the emergence of global networking equipment markets and a trend towards deregulation, technical skills in network operations and services now have increased global applicability. Global customers will demand well-integrated services across national borders in technical and customer service dimensions.
Globalization also offers an opportunity to diversify risk. In addition to general macroeconomic and political risks, the growth rates of the communications industry are likely to vary significantly from country to country. There is still an opportunity to explore phone service as phone penetration rates in the world are still low compared to some countries. Telephony is a well-established service that brings value to customers from many different backgrounds and cultures. There is huge potential for growth in phone services around the world. To reduce the risks of a particular country realizing its growth potential, companies linked to the growth of telephony services can position themselves to exploit the growth that may occur in other countries.
Companies involved in international trade have to deal with significant cultural differences as well as the absence of a common legal framework applicable at the international level. These differences are particularly important in telecommunications markets because the services traded are complex and the regulatory framework is crucial. Globalizing a business is also a way to reduce transaction costs and facilitate faster reactions to new business opportunities.
Over the last decade, “globalization” was more a slogan than a reality, since it mainly referred to alliances between large operators to provide end-to-end services to multinational companies. Public networks and residential customers have been relatively spared from this type of globalization. In the current decade, globalization has already become much more of a reality, and in the future it will be possible for foreign operators to have direct access through interconnection and interoperability to public networks in most of the world’s major telecommunications markets, and to invest directly in the development of these networks.