Eco 205 Week 1 Assignment

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Telecommunication Industry Final Project: Telecommunication Industry Completion Axia College of University of Phoenix ECO 205 Economic Theory Instructor: Joan Lee May 11, 2008 The telecommunication industry has a major influence to the United States economy. The labs of Silicon Valley have ways to increase the capacity of everything from processors to storage space seemingly beyond all sense and reasonable demand. The telecommunication capacity drives demand rather than the other way round. Investors contribute billions of dollars at new telecoms companies that were laying fiber networks in competition with the incumbents. The pace of new fiber lying became frantic in which sales growth at leading fiber makers such as Corning hit 50% last year, nearly three times the previous rate. The race to lay new fiber reached such extremes that one company, 360Networks, rose to fame not for its network…show more content…
The same time buyer power can differ somewhat among market segments and customers can be as small as individual residential users or be as big as an ISP like America Online or a large university. The switching costs are relatively low for residential telecommunication customers, but can get higher for larger business customers, especially those that rely more on modified products and services. Products and services from non-traditional telecom industries pose serious substitution threats such as cable television and satellite operators now compete for buyers. Cable guys with their own direct lines into homes can offer broadband Internet services, and satellite links can substitute for high-speed business networking needs. The wave of the industry is free from regulation that together with the receptive capital markets of the late 1990s paved the way for a rush of new

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