The Big Telecom Challenge

from the the-world-is-changing dept

In the last few years, we’ve been confused by the fact that telecom companies were consistently spinning out the business lines that were clearly the future of telecom. They said the valuations made it impossible to keep them in house, but it’s left them lacking. Many of those old line telecom firms are finding themselves in a bit of trouble, missing out on the product lines they most need, and are trying to figure out what to do. Looking mostly at Europe, Business Week has a long, detailed piece looking at the challenges facing the big telecom firms – focusing mainly on how wireless and internet connections are a huge threat to their traditional business plans. It seems that not all of them are sure how to proceed, with many taking somewhat different strategies. Even some companies that spun off their wireless divisions are suddenly getting back into the business. A few firms, of course, are recognizing the inevitable and are pushing their own customers to ditch old line businesses for their new businesses. Companies that cannibalize their own business lines by offering something better are much less likely to be eaten alive by the outside competition. However, many telecom firms don’t think that way, and prefer to keep their obsolete business lines going as long as possible.

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