Industry Summary
The Wireless Telecommunication Carriers industry entails the operation and maintenance of transmission as well as switching facilities in order to provide direct communication via cellular networks that are based on radio. The services included in the definitions of operation for the Wireless Telecommunication Carriers industry include paging services, phone services, wireless video services and wireless internet services. The main activities carried by this industry include: the provision of wireless network communication long distance, local and international calls, renting out equipment for wireless telecommunication, the provision of messaging services like multimedia messaging services and short message services, the sale of mobile devices and cell phones and the provision of wireless internet services (Dunn et al, 2009).
In order to understand the Wireless Telecommunication Carriers industry better, it is imperative to understand the bargaining power of both the suppliers and the buyers. Additionally, it is of outmost importance to identify the possible threats to the industry such as the treat of new entrance and the threat of substitute. Also of importance is the comprehension of the effects of competitive rivalry (Brown & Stoev, 2009).
One of the dominant bargaining powers for the suppliers exhibited in this industry is the supplier’s power over the wireless telecommunication industry. FCC is considered to possess a lot of power in the wireless telecommunication industry. It is charged with regulating the frequency used by the wireless providers to receive and broadcast their signals. The organization has the power to license organizations to operate on various frequency spectrums such as Cellular phones, CB radios, Wi-Fi and television. FCC trade o the fact their control over the broadcasting frequencies which are finite in number. This enables the organization to set the price. On the other hand, the mobile phone suppliers have limited power over the wireless telecommunication industry. They have reduced power as compared to the service providers in the same industry. Even worse, mobile phone suppliers are losing bargaining power owing to the some alterations that are currently taking shape (Dunn et al, 2009). These changes have forced the mobile phone suppliers to implement certain measures that will soon affect the direct consumer of their products. Some of the companies in the mobile phone supplier industry have begun to alter some of their policies regarding subsides to the customer. The reduced amount of bargaining power exhibited by mobile phone suppliers is attributed by the high completion among the manufactures as well as the unlimited options at the consumer’s disposal.
As opposed to the suppliers, the consumers of wireless telecommunication products and services exhibit an elevated bargaining power (Leiponen, 2008). This is majorly due to the increase in the variety as well as the number of wireless telecommunication products and services. Additionally, the rapid development in technology and increased number of consumers has also contributed to the elevated bargaining power currently enjoyed by the consumers. The consumers of the products and services offered by the wireless telecommunication industry tend to look for products and services that are characterized by low prices and high efficiency.
One of the major determinants of success of the industry is threat. Threats to an industry come in different forms. The threat of novel entrants form part of the major deterrent to success the industry faces. This threat is experienced by the industry in form of technological problems, cash flow, lower profitability as well as cash flow (Mozer et al, 2011). Apart from the threat for new entrants, the industry also faces the threat of substitutes as well as completion rivalry. The high risks associated with the threat of substitutes is majorly caused by low consumer switching costs, high prices of the substitute product as compared to the industry product, lower or equal quality of the substitute product in relation to the industry product and increased performance of the substitute product as compared to the industry product.
Overall Analysis and Recommendations
The industry of Wireless Telecommunication Carries has tremendously gained from the fast development of mobile and other computing devices. Besides the rapid development of mobile devices, the industry has also benefited from advancements in technology as well as infrastructure investments. All the three and other factors have seen to the increase and growth in revenue generated by the Wireless Telecommunication Carriers industry across the country. Over the coming years, the performance of the Wireless Telecommunication Carriers Industry will extremely rely on how completion unfurls for wireless variety. However, the Wireless Telecommunication Carriers industry is expected increase due to the intensifying demand for wireless data services. The ever increasing number of subscriber base in addition to the propagation of the mobile devices is expected to stimulate growth in the wireless telecommunication carriers industry (Brown & Stoev, 2009).
It is imperative for the industry to check the high cost associated with manufacturing novel devices in order to curb the fluctuations in profitability recently witnessed. However, the increasing number of consumers is expected to increase the margin over the next few years. In the past, the wireless telecommunication industry has been defined by transition from basically providing voice services to gradually more focusing and augmenting with wireless data provision. The industry should take advantage of the technological advancements, such as the long term evolution standards as well as transition to fourth generation wireless data service, to further transform the industry into a more profitable industry.
References
Bls.gov,. (2016). Wireless Telecommunications Carriers (except Satellite) - May 2014 OES Industry-Specific Occupational Employment and Wage Estimates. Retrieved 14 February 2016, from http://www.bls.gov/oes/current/naics4_517200.htm
Brown, M. W., & Stoev, O. V. (2009). U.S. Patent Application No. 12/465,107.
Dunn, J. M., Semple, B. P., Stern, E. H., & Willner, B. E. (2009). U.S. Patent No. 6,591,103. Washington, DC: U.S. Patent and Trademark Office.
Leiponen, A. E. (2008). Competing through cooperation: The organization of standard setting in wireless telecommunications. Management Science,54(11), 1904-1919.
Mozer, M. C., Wolniewicz, R., Grimes, D. B., Johnson, E., & Kaushansky, H. (2011). Predicting subscriber dissatisfaction and improving retention in the wireless telecommunications industry. Neural Networks, IEEE Transactions on, 11(3), 690-696.
