Telecom Industry - Group Post

Our group has selected to study companies that represent the various layers of the telecom stack. At a very high level, this is how we interact with each other:



1) Cisco makes the infrastructure hardware.
2) Ericsson and Alcatel-Lucent buy Cisco's hardware (and create some of their own) and create and manage the network infrastructure
3) AT&T and Bharti Artel contract to either buy or lease the network and then allow consumers to use it to make calls and data connections
4) Sony-Ericsson makes the phones that actually make the calls and data connections. This layer also provides the application platforms for developers to use to create apps that consumers use to make data connections.



When studied independently, each layer has different challenges unique to itself. However, when taken in aggregate, one major problem emerges. Namely, the current revenue business model is not sustainable. The largest area of growth is in the phone and app layer. Consumers have shown a willingness to spend more money to get a more feature-rich experience. However, the costs that need to incur to support this experience are required lower in the stack. The network needs to be upgraded to support the proliferation of data connections but the companies that need to make this investment are not the companies that stand to benefit the most from its use.