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The Information Industry Convergence and Growth Strategies of Telecom Operators

Author: ZengYong
Tutor: XinZhanHong
School: Beijing University of Posts and Telecommunications
Course: Management Science and Systems Engineering
Keywords: convergence of information industry paradigm dynamic analysis model malfeasant competition alliance and merger growth strategies
CLC: F49
Type: PhD thesis
Year: 2007
Downloads: 937
Quote: 1
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Convergent transformation of information industry structure has been the prominent feature of current information industry. The campaigns of cross-industries alliance and merger seem to be very active; all most all companies from internet, media, entertainment and broadcasting & television industries are modulating actively their business model and supplying multiple services to consumers. However, the traditional telecommunications industry is edging by the industrial convergence, which can be footnoted by the words of Vint Cerf: "if you don’t feel delusory in the telecommunication cycle, you will be regarded as an ignorant man".In above specific background, this dissertation will focus on the issue of information industry convergence and growth strategies of telecom operators in such conditions.Information industry convergence shows intricate ostensibly as a great trend, but it also has its own inherent rule and developing paradigm. The dissertation defines several concerning concepts about the information industry convergence at first, the information industry convergence means four layers amalgamation including cross-industries, technological platform, market and policies at the basis of digital communication technologies. The industrial convergence paradigm indicates that telecom operators should process three phases which include the network communication, network media and network applications, each phase may bring the competition from other industries and the growth chances imparted by the industrial convergence.Currently the developed countries are piloting the wave of information industrial convergence, but different developed countries such as U.S, U.K, Korea and Japan their characteristics of industrial convergence individually. In North America, the information industrial convergence started earliest and extended to the end of many related industries, but the problems of monopolization and regulation collision are still in the question. In European Union, although the information industrial convergence has been programmed orderly, the convergence level shows to be diverse in member states of EU, the trend of British information industrial convergence seems to close to U.S, but the EU feature of SMP and Common operation still is outstanding. In Korean and Japanese market, the prevalent phenomena are business giants which are backed up by their own government .and those monopolies are inclined to be allied, shareholding and merging, but telecom industry and broadcasting & television industry haven’t been granted to be ingressive symmetrically which is distinctive to North America and EU regions.The information industrial convergence is developing rapidly in those developed markets and there should be a common dynamic analysis model on industrial convergence, after comprehensive research, the paper discovers the key factors of such model should be involved information technologies, competition, policy and economic growth level and those four factors and convergence are positive correlation in the process of industrial convergence.Industrial convergence is shaking the traditional growth, competition and business pattern of the telecom industry that has a history of over 100 years. Under the background of information industrial convergence, there are two growth approaches in the face of telecom operators, the first is that telecom operators struggle for competitive initiative by the use of dissymmetrical market position, the other is telecom operators can seek extensive growth opportunities throughout the convergent acquisition and merger cross information industries.Dissymmetric market structure involved firm power, regulation, information and business is regarded as the general premise of malfeasant competition for incumbents. The incumbents could nick, collude, depredate or canvass for government by the advantageous position in the dissymmetric market, those malfeasant strategies mechanism are consisted of Milgrom-Roberts Model(1982), Cournot Quantity Collusion Model, Fudenberg-Tirole Model(1985) etc, an empirical research of VoIP depredation also indicates that malfeasant competition of telecom operators is favorable to sustain their predominant position in converging market structure in short term.Converging alliance and merger have been the effective approach to telecom operators in the process of industrial process, but converging alliance and merger to those operators should be met the common premise which included the compact correlation among industries and the fluctuation between dealing cost and management cost which is favorable to converging alliance and merger of telecom operators, however, such premise is met to operators, the successful alliance and merger also take account of other effective concerns such as dependent degree among firms correlation, firm power comparison, fluctuation of merger value and interference from government.The dissertation consists of six chapters, with exception of introduction of the first chapter and conclusion and shortage of sixth chapter, the second chapter mainly researches the developing formula of industrial convergence, the third chapter puts forward the dynamic analysis model of industrial convergence on basis of the study of industrial convergence progress from developed countries, the fourth chapter mainly analyzes the malfeasant competition of telecom operators under the pressure of industrial convergence, the fifth chapter researches the cross-industries alliance and mergers in the information industry and their effect on telecom growth in long term.

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