Advancements in Telecommunications

In 1990s

In 1998, mobile companies such as Motorola have developed high tech models with built-in FM radio and infrared connectivity. Ten years later, many phones have options for video calling, digital camera, wireless networking, responding to emails. After five more years later, Skype company has developed a new platform which allow users to make free phone calls between any two computers.

Telecom industry has used long-established R&D models which main purpose was to keep the whole process of innovating new products and services in secret so no competition will be created. However, years later the concept of open innovation was developed by Chesbrough (2006) and was described as “valuable ideas can come from inside or outside the company as well” http://books.google.co.uk/books?id=OeLIH89YiMcC&printsec=frontcover&dq=open+innovation&hl=bg&sa=X&ei=d7PSUr2SPO6M7AbU44EI&ved=0CC4Q6AEwAA#v=onepage&q=open%20innovation&f=false The idea of Open Innovation is to involve any shareholders who have interests of the product like partners, suppliers, customers and society.

The key driver for innovation in telecommunication industry is to improve the economy by attracting potential companies to invest in the country. The accessibility, quality and price of communication services are the most important points to consider when choosing a new place for establish a business.

An example of open innovation models are presented by the Norway company Telenor. One of them is Content Provider Access (CPA) which provides connections to the customers and giving them own content services such as short message services and multi media services. CPA allows users to send and receive text messages, audio and picture content messages and short videos...

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...lse suggests that new entrants in the telecom industry produce innovation and patent is one of the ways the monopolist companies could insure their place in the market.

Porter Five Force

In terms of barging power of suppliers, there are enough suppliers in the industry. However, the lack of skilled managers with the latest technologies could leads to weak operation in terms of hiring and salaries. The power of buyers is extremely important because of the variety of products and services. Other threats for telecom industry are the varieties of substitute products and services such as phone calls and online calls. The volume and opportunities which the market could provide are encouraging new entrants to the industry. Another barrier for innovation could be the competitive rivalry due to the new entrants, consistently changing products and knowledgeable employees.