Abstract
This chapter focuses on the role of telecom carriers, analyzing operator strategies and performance in entering activities such as the entertainment industry, financial services or e-health. The chapter explores the evolution taken place in the development and deployment of the 4G long-term evolution technology, and the regulatory changes involved in such an evolution. It illustrates the large investments required in mobile technology which are driven by the whole of the ecosystem, which includes operators, software producers, hardware producers and contents, services and applications providers. The chapter tackles the regulation that has favoured or in some cases hindered the development of the telecom sector and the digital economy in Europe in general and in Spain in particular. It concludes by discussing how despite the large investments undertaken by mobile network operators, the growth in their revenues has stagnated in recent years, largely because their principal markets are saturated and on account of competition from virtual operators and the top firms also offering voice and data services using the networks deployed by the former.
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Notes
- 1.
An exabyte (Eb) is equivalent to 1000 Pb (Petabytes) or 1 million terabytes (Tb).
- 2.
In Spain, Yoigo (TeliaSonera) has been the most active carrier in deploying 4G while Movistar (Telefonica), Vodafone, and Orange have waited for the liberalization of the band before using the digital dividend to drive the expansion of 4G throughout the country.
- 3.
The European Commission recently accused Google of abusing its dominant position, suspecting the corporation of giving priority to its own contents in searches and obliging users to use its services and tools to manage their publicity and marketing. Although these are subtle and as yet unresolved issues, they evidently require a regulatory framework generating confidence in an environment of change and radical uncertainty like Internet. Such a framework would prevent abusive practices and guarantee universal access to the net.
- 4.
In 2000, Spain allocated via tender four Universal Mobile Telecommunication System (UMTS) licenses, the standard for 3G, to Telefónica Móviles, Vodafone, Amena, and Xfera (subsequently Yoigo). Spain was, after Finland, the second country in Europe to do so.
- 5.
Initiatives launched in Europe provided the frame of reference for the development of ICT in Spain. The five-year i2010 initiative approved in June 2005 was the EU’s first coherent global strategy for the development of the Information Society in Europe (COM 2005 229 final).
- 6.
The Red Queen theory is a concept introduced by the evolution biologist Van Valen (1973) to explain the extinction of families of organisms in a given time period. It is also applied to the economy to explain the behavior of companies when trying to keep abreast of the competition.
- 7.
According to World Bank, in the European Union the penetration rate was 125 % in 2013, actually exceeding 150 % in some countries, including Latvia, Finland, Estonia, Italy, and Austria.
- 8.
In early 2015 in Spain 47 MVNO were operating; 5 of them were using the Telefonica network, 7 the Vodafone network and 35 using Orange’s.
- 9.
Apart from the big names (Vodafone, Telefonica, Orange, BT, Three, MTN, and TeliaSonera) other operators, including Cosmote, Wind, Siminn, Eircom, LMT, Post, Moldcell, KPN, AL Betelecom, MTS, Telekom Austria, Turkcell, Belgacom, Telenor, Tele2, SFR, and Bouyguess Telecom are amongst the first three operators in some European markets.
- 10.
Telefonica was a state-owned firm until it was privatized in 1997. Telekom Austria was privatized in 2000. It was bought by America Movil (59.7 % of the capital) in 2014.
- 11.
Europe is in fact aware of the importance to the economy of deploying the 4G-LTE network and major growth is expected in penetration rates. GSMA Intelligence (2014a) expects the rate to rise from 10 % as of early 2015 to a situation where, by 2020, more than half of all mobile connections will be 4G.
- 12.
In 2013 and 2014 Telefonica paid no dividends out to reduce debt.
- 13.
China Mobile, AT&T, Telefonica, Vodafone, Verizon, France Telecom, Deutsche Telecom, NTT, NTT DoCoMo, and America Movil.
- 14.
Apple, Microsoft, Google, Amazon, Facebook, eBay, Yahoo, Baidu, Tencent.
- 15.
An example of this is Telefonica’s agreement with the Circulo de Lectores book club.
- 16.
In this “epigenetic” drive, Google is one of the players entering the ultrafast Internet business and offers clients à la carte TV contents.
- 17.
This is the greatest monetary amount of all: $49 billion.
- 18.
http://ee.co.uk/our-company/newsroom/2015/05/31/EE-trials-live-4G-broadcast-of-FA-Cup-final-at-Wembley-stadium (last access April 15, 2015).
- 19.
Sky has broadcasting rights on the English Premier League, and after receiving permission from the fair competition authorities to acquire Sky Italia and Sky Germany, to bring them together in Sky Europe, has become Europe’s largest pay TV group.
- 20.
Although in principle this disinvestment may favor the acquisition of other firms, through having the cash available to do so, the downside is usually that it increases the acquisition premiums, usually quite high per se.
- 21.
In 2015, Facebook had 1.4 billion users, Google was estimated to have 300 million active users in Google+ (although the official figure is 2.5 billion) and Apple’s iTunes had more than 800 million accounts, most with a credit card attached.
- 22.
Orange has set up an e-health platform open to patients, doctors, insurance companies, etc., to provide a broad range of healthcare services: remote surgery, patient monitoring, online medical records, etc. More than 50 % of doctors in France use Orange systems to send patient treatment forms and the platform connects 12 million-plus French patients to their insurance companies (Friedrich et al. 2013).
- 23.
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Araujo, A., Urizar, I. (2016). 4G Technology: The Role of Telecom Carriers. In: Gómez-Uranga, M., Zabala-Iturriagagoitia, J., Barrutia, J. (eds) Dynamics of Big Internet Industry Groups and Future Trends. Springer, Cham. https://doi.org/10.1007/978-3-319-31147-0_7
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