Future of Telecommunications

3896 WordsApr 11, 201216 Pages
| WORK CASE 15 | Case Study 15 | Bus5480 Strategic Management Professor: Dr. Uchenna Nwabueze | Skype versus AT&T and the Future of Telecommunications | 4/8/2012 | Prepared by: James Whetsel | Executive Summary This report was written to analyze the competition among the Voice-over Internet Protocol (VoIP) industry segment, especially as it relates to the relationship between Skype and AT&T and the competition between the VoIP market and the land line market. In analyzing this segment we found that VoIP is a growing industry in what has historically been predominately a land line telecommunication company such as AT&T. The industry segment is faced with a rivalry type competitive market that is…show more content…
With a roughly 5 percent market share by the end of 2010, VoIP was still a small competitor in the industry. A major opportunity for VoIP providers was to capitalize on the cellular market. Experts predicted that, by 2019, half of all mobile calls would be over IP networks. The IP connections would be available through VoIP applications that ran through a cellular device. Mobile VoIP applications are expected to reach 278 million users, generating a $32.2 billion profit. What does the five forces analysis reveal about the chances for profitability in the VoIP industry?3 1. Current sellers competing in the market * It's been good times to be a VoIP user, and bad ones to be Skype. * To a great extent, up until now Skype has had a lock on the consumer P2P VoIP market, and even though it’s recent move into business VoIP hasn't been universally well-received, things looked rosy for the company in that market as well. * But a trio of competitors makes the future less rosy for Skype. Yahoo, the well-financed startup Jajah, and the big Web site Lycos have all released no-cost or low-cost VoIP P2P solutions recently, attempting to muscle in on Skype. 2. Threat of new competitors’ market entry * Possibly the most intriguing of the group is the European-based Jajah. The service requires no client to
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