Management Information Systems, 13TH ED.
MANAGING THE DIGITAL FIRM
Kenneth C. Laudon ● Jane P. Laudon
Learning Track 2: Telecommunications Services Provided by
Commercial Communications Vendors
Telecommunications is the digital plumbing that holds the modern digital firm together, and
makes it possible for the all the computers, telephones, and Internet devices to work. Closely
tied to the evolution of the modern computer and processing chips, telecommunications capac–
About 193 million adults (18+) use the Internet in the U.S. and about 60% of them have a wire-
less Wi-Fi access capability. Wi-Fi is more of a technology than it is an industry provider—there
are very few firms that specialize in the delivery of Wi–fi service and they are not consequential in
terms of revenue. at said, Wi-fi technology (whoever installs and operates it) has to be a part
of the decision calculus for managers who are trying to build an appropriate telecommunications
infrastructure for their firms.
ese developments in telecommunications have complicated the decision making of managers in
is revolution in telecommunications technology and services was facilitated by a regulato-
ry environment that sought to break up old monopolies, encourage new market entrants, and
reduce barriers to competition. Until about 25 years ago, the American Telephone and Telegraph
(AT&T) Company provided virtually all telecommunications services in the United States, with
Chapter 7: Telecommunications, the Internet, and Wireless Technology
Chapter 7 Learning Track 2 2
single national telephone and telegraph network, Congress regulated the prices that AT&T could
charge and required universal service to be extended to all regions of the country, including rural
America, at a “reasonable price.”
Competition ultimately drove four of the RBOCs out of business, and today there are only three
RBOCs left:
◆ Qwest: created by the merger of US West and Qwest Communications International Inc.
◆ AT&T: created by the merger of SBC, Ameritech, and Pacific Telesis, AT&T and Bell South. In
2004, Cingular Communications merged with AT&T. In 2006, the new company dropped the
Cingular name and is now called AT&T.
◆ Verizon – created by the merger of Bell Atlantic, Nynex, and GTE.
e Telecommunications Act of 1996 unleashed even more competition in telecommunications by
Privatization and the removal of legal barriers to market entry (all loosely referred to as “dereg-
ulation”) have dramatically reshaped the global telecommunications industry over the past two
Chapter 7 Learning Track 2 3
continued
service providers, and cable companies—many of these new entrants have either gone out of busi-
ness or been bought by the large national and global players.
Prior to deregulation and the technology device explosion, telecommunications decisions were
comparatively simple. AT&T was the only choice for telephone service, and for data communica-
TABLE 6.1 The Largest Telecommunication Providers to U.s. Homes and Businesses
Providors Services
INTEGRATED TELEPHONE CARRIERS
AT&T AT&T Inc. is the largest communications holding company in the United
States and worldwide, by revenue. It is the leading worldwide provider of
IP-based communications services to businesses and the leading U.S. pro-
vider of wireless, high speed Internet access, local and long distance voice,
Verizon Communications Second largest wireless and landline local and long distance telephone car–
rier; Internet access, VOIP Internet telephone, Internet video, business con-
tinuity and transaction-based voice and data services; Internet backbone
provider. Now offering high performance fiber optic service to homes
(FIOS) for broadband Internet applications like video and television
Sprint Nextel Third largest wireless and landline local and long distance telephone car–
rier; Internet access, VOIP Internet telephone, Internet video, business
continuity and transaction-based voice and data services; Internet back-
bone provider.
Chapter 7 Learning Track 2 4
Providors Services
PURE WIRELESS PROVIDERS
Virgin Mobile Virgin is an international brand of mobile cell service popular in Europe but
also with a small U.S. presence. Offers wireless data and voice service, pic-
ture and text messaging, downloaded music and movie clips on mobile
phones; mobile Web access, downloadable games.
T-Mobile T-Mobile is a subsidiary of Deutsche Telecom (120 million customers in
Research in Motion (RIM) Research In Motion (RIM) is the designer, manufacturer and marketer of the
BlackBerry, a proprietary email and Internet access network. Aside from
email, RIM provides phone, text messaging (SMS and MMS), and Internet
access.
INTERNET TELEPHONY (VOIP) PROVIDERS
Skype Skype (owned by eBay) provides free instant messaging, voice calling, and
video conferencing among the more than 700 million registered Skype