Fundamental instability: Why telecom is becoming a cyclical and oligopolistic industry

Abstract

This essay analyzes the long-term lessons of the recent upturn and downturn in the telecommunications industry. It concludes that volatility and cyclically will be an inherent part of the telecom sector in the future. To deal with such instabilities, companies and investors seek consolidation and cooperation. Government, too, is likely to stress stability more than before. Hence, an oligopoly is likely to emerge as the equilibrium market structure, and with it some regulation. © 2006 Published by Elsevier BV.