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Chp . 3 – Industry Overview. Traditional Telephone Companies & Cable TV Providers Mobile Providers Smaller Competitors Internet Based Competitors Why Governments Regulate Telecommunications. The Bell System in 1984.
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Chp. 3 – Industry Overview Traditional Telephone Companies & Cable TV Providers Mobile Providers Smaller Competitors Internet Based Competitors Why Governments Regulate Telecommunications
The Bell System in 1984 • SBC purchased BellSouth, the former AT&T’s long distance and AT&T Wireless • SBC changed its name to AT&T In 2005 after the above purchases
Incumbents: AT&T, CenturyLink and Verizon AT&T Inc. • AT&T Wireless • AT&T Landline services • Residential Internet access, voice telephone & TV • Business & Commercial offerings • broadband • Cloud and managed services • International Networks • Wholesale offerings to other carriers • Verizon Communications • Verizon Mobile • Jointly owned by Vodafone and Verizon • Verizon/CTLINK landline services • Residential Internet access, voice telephony & TV • Business & Commercial offerings • Business broadband • Cloud and managed services • International Networks • Wholesale offerings to other carriers
Industry Overview Carrier/competitor Each group answer all questions What services do they offer? Who are their customers? What are their strengths? What are their challenges & weaknesses? • Group 1: AT&T Inc., Verizon Communications, CenturyLink • Group 2: XO, Level 3, Windstream • Group 3: Apple, Google, Amazon, Netflix • Group 4: Comcast and Charter
Mobile Providers Largest providers Industry issues Advantages No wires! Challenges Upgrades Competition Margins Churn Regulations Capacity • Verizon Wireless • 60% owned by Verizon • 40% by UK’s Vodafone • AT&T Mobility • Sprint Nextel • T-Mobile USA • Owned by T-Mobile Germany • MetroPCS
Cable Multiple System Operators (MSOs) Largest cable MSOs Offerings Triple plays Pay TV Internet access Voice telephony Business offerings Cloud & managed services Fiber to the premise Voice and long distance Wholesale offerings Backhaul to mobile carriers Metropolitan networks • Comcast • Time Warner Cable • Cox Communications • Charter
Industry Segments • Facilities based Carriers • Resellers • Wireline • Wireless • Cable TV vs. traditional phone companies • Internet based competitors
Internet Based Competitors • Amazon • Apple • Google • Microsoft • Netflix • Technological enablers • Fiber • Broadband • Powerful computers • High-speed processors • Competing offerings • VoIP • Streaming TV • Cloud services Comcast to homes Netflix
Results of Competition Providers Competition What are benefits of competition? What are drawbacks of competition? How have your choices increased or decreased? What do you think are the result of so many mergers? • - Comcast • Local telephone companies: AT&T and Verizon and CenturyLink • - Competitive providers: XO, Level 3 and Windstream • -Vonage, Google, and Skype • Wireless carriers: Sprint, T-Mobile, Verizon Wireless, AT&T Mobility, MetroPCS
Rationale for Government Regulations • Safety • Security • Wars • National disasters • National defense • Consumer protection • Competition
Comcast Regulatory Issues • Mergers • Spectrum • Intercarrier compensation • Cable TV is too expensive! • Can we change our provider?
Summary • A complex industry • New competitors • Technological enablers • Changes in consumer access to entertainment • Changes in modes of communications • Why do governments regulate telecommunications? • Regulatory impact • Competition • Licensing • Court decisions • Subsidies