Vertically integrated market structure of communications industry and future horizontal market structure

Abstract

Technological advancements and innovations have changed the market and services structure of communications industry drastically. Due to technological innovations and customer demands, boundary lines between telecommunications, information and media industries have blurred to a point that it is becoming difficult to distinguish between telecom, information and media services. The traditional vertically integrated networks are being deconstructed and are being transformed into horizontally interconnected function layers. The market structure is becoming more and more vertically integrated but technological advancements are dragging the markets towards more horizontally integrated value chain structures and clearly indicating the need for vertical disintegration of this market. This paper analyses the recent trends and structure of vertically integrated communication industry and also discusses the future horizontally integrated value chain structure and future horizontally integrated structural layout of carriers. In future networks, services will be offered on the basis of an integrated access platform and will no longer be dependent on a specific individual access technology. The main players will have to restructure themselves into horizontally separated areas of Networks, Services and Sales to survive and to grow and will also have to focus on one of the areas where they have competitive edge.