Rivalry Through Alliances: Competitive Strategy in the Global Telecommunications Market

Abstract

Since the early 1990s, Europe and the United States have witnessed multiple mergers involving leading telecommunications companies. Other strategic partnerships between major telecommunications operators from North/South America, Europe, and Asia are forming almost daily. The trend toward alliances goes beyond the traditional wireline telecommunications sector. We are also seeing mergers between major wireless players, between old and new media companies, and between old and new network companies. We are also seeing partial equity investments in leading ecommerce software makers and online joint ventures in Internet access services between companies. The nature of competition today in the global telecommunications industry seems to center around market activities that aim at gaining competitive advantages through strategic combinations of resources and presence in multiple products and geographical areas. This study is the first and the qualitative section of a two-part strategy research project that examines the state of the global telecommunications market and assesses the business factors and environmental variables (e.g., country/region economic profiles, political systems, and regional alliances) that influence the strategic directions of the firms in the converging global telecommunications market. Specifically, this paper investigates the forces that have contributed to the globalization of telecommunications services, the major telecommunications strategies and strategic alliances in the global telecommunications market, and the factors that might have contributed to the outcome of these alliances.