Price-Reduction Of Long Haul Fixed-Line Research Proposal

Length: 18 pages Sources: 4 Subject: History - Israel Type: Research Proposal Paper: #94053546 Related Topics: Procurement, Telecommunications, Fixed Costs, United Arab Emirates
Excerpt from Research Proposal :

To avoid repeating negative historical experiences, regulatory regimes need to block the control and domination by networks/platforms. In the report, "Infrastructure and Development: A Critical Appraisal of the Macro Level Literature," Stephane Straub (2007) reported that at times, in some developing companies, "the hope of getting a fixed-line installed is a distant and costly dream" (p. 4). Meantime, the primary option for the individuals waiting for fixed-line telecommunications services would likely be having to us a much too expensive cell phone.

In 2010, much of the fixed-line telecom industry faces growing threats from cable and wireless service competitors.

As the writer of the quote introducing the study section pointed out, more firms are realizing "a cellular wireless solution" generally provides "more stability than the usual wired connections… [and serves as] a valuable asset built for the long haul" ("Lincolnshire Drainage Board…," 2010, ¶ 9). In the book, Integration in Asia and Europe: historical dynamics, political issues, and economic perspectives, Paul J. Welfens (2006) reported that in many Asian countries as well as in the EU and in the U.S., digital telecommunications proves challenging due to intense competition. Problems also regularly surface in fixed-line communications in the Middle East as in some areas; the former state-owned operator continues to fill a dominant position in the local network and the access market.

Expansion of long distance, fixed-network telecommunications became more open in the U.S. after 1984 through the 1996 Telecommunications Act, as it unlocked the local loop to competition. "In Asia, the liberalization of telecommunications is rather advanced in Singapore and in Japan but not so much and other Asian countries" (Welfens, 2006, p. 39). Welfens explained that convergence distorted the market demarcation between TV and Telecommunications as well as between data traffic and voice telephony. In addition to concerns regarding convergence, competition in the area of fixed-line telecommunications serviced has continued to increase.

In the book, Organisations (sic) and the business environment, David J. Campbell and Tom Craig (2005) have noted that the rapid changes in communications technology have contributed to the evolution of the descriptive term, the "communications revolution." Progress in First World telephone systems has supported the dramatic rise in mobile telephony, email, text messaging, and music and video downloads. Despite this progress, a dearth of a fixed-line infrastructure exists in some Third World countries. This absence of fixed-line infrastructure proves to be "a particular advantage in boosting the growth of modern telecommunications in Third World countries" (Campbell & Craig, 2005, p. 317). The need for modern telecommunications in these countries also reflects major implications for trade and economic development in the area of fixed-line telecommunications.

Fixed-line Long-Haul Telecommunications Service

As numerous customers have relinquished their second fixed telecommunications lines or completely transferred to mobile networks, many incumbent operators experienced decreases in their number of fixed-line subscribers. The increasing competition has lead to loss of revenues and reduced profit margins for fixed-line services. Telecommunications services operators experienced "the pressures of mobile infrastructure competition, the challenge of VoIP and regulation to open up the local loop, so that unbundling… [could] take place, with servers providers competing in the local loop" (Organisation for Economic…, 2006, p. 55). To counter these concerns, incumbent operators of fixed networks have begun to consider co-operating with "converged" architectures with mobile and VoIP ventures. As a result, fixed-to-mobile convergence began transforming the large fixed-line operators' fixed infrastructure architecture.

Long distance transmission, identified as the chief change contributing to national, international, terrestrial or sub-sea infrastructure costs, stimulated the growth of the Internet, a primary components of the global fiber network. All growth relating to fixed-line telecommunications, however, ultimately depends on the country's economic circumstances as well as its "(over -) availability of capacity" (Organisation for Economic…, 2006, p. 95). The


For more than a decade, the Internet, as well as an ongoing international trend of privatization of national telecommunications industries, has contributed to the increasing demand for broadwidth. This demand has surpassed the resources satellite transmission offers in voice and data. "The fraction of transoceanic voice and data transmitted over undersea cables has grown in the past 12 [17in 2010] years from 2% to as high as 80% in 2000" (Organisation for Economic…, p. 96). The numbers of cables on the seabed has matched the growth of demand. In regard to progress made by geostationary satellites for long distance transmission, their cost, delay, limitations and reliability contribute to them being deemed a redundancy backup for WDM fiber.

Procurements in the Middle East/Southwest Asia

In some parts of the Middle East and other parts of the world, partly due to the increase of mobiles, the use of fixed-line voice revenues has decreased. To improve profits, in response to the reduction in revenues; telcos have begun changing to broadband services. In the Arab Middle East, fixed-line teledensity initially appears extremely low; compared to teledensity rates of approximately 60% in the United States. The lower figures, however, may be attributed to the larger household sizes in the Middle East and not as low as they may initially appear. For example, in Saudi Arabia which reports a teledensity of just 16%, approximately 75% of homes in this region use fixed-line telephones (Paul Budde & #8230;, 2009). In the article, "Etisalat: The Middle East's largest telecoms company is attracting greater scrutiny as it increases in size," Will Hadfield (2008) reported that Etisalat, reportedly the largest telecoms company in the Middle East, is responsible for the health of fixed-line and mobile telecommunications services there.

Middle Eastern governments have liberalized fixed-line markets. Nevertheless, the only real competitors to companies such as Etisalat are reportedly international calling cards and VoIP-based services. Even though licenses have been awarded in some countries, like Bahrain, "for fixed-line domestic and international services… none of the alternative operators individually have yet made much impact" (Paul Budde & #8230;, 2009, ¶ 5). Most national fixed-line operators are now partially privatized; primarily through share sales. These sales, however, are generally only available to individual citizens of the home country.

The noted uncertain economic outlook for the Middle East as well as the universal decrease in loyalty to technology platforms and providers will potentially keep contract lengths shorter than in the past. Some clients and providers may even prefer to contract for pay-per-use billing. Previous best practices in telecommunications and technology procurement typically "favored long-term (up to 10 years) solutions-based contracts rather than pay-per-use billing" ("Telecommunications Predictions…," 2010, ¶ 2). The choice of contract, nevertheless, needs to benefit both negotiating parties. The long-term contract that provides a steady flow of income for the supplier should simultaneously ensure the customer would receive better quality with lower costs.

Due to constraints evolving from the global economy, however, some may not agree to terms for longer than three years; making long-term deals rarer. To improve their cash flow, some suppliers may determine to reduce their scope of geographic or functional, etc. operations. The consumerization of technology as well as the growing inclination to change suppliers or purchase usage on a pay-per-use basis may additionally affect contract lengths. Regarding the solutions market, this tendency may reflect the increasing desire for shorter-term contracts or contracts with built-in flexibility that would operate like a series of shorter contracts.

The contract needs to be designed with its roots in reality. The supplier should be certain the organization can realistically deliver. Costs need to include sufficient margin to insure the relationship will prove worthwhile for both parties; so that it will more likely benefit both parties over the long haul (Telecommunications Predictions…, 2010).

Enhanced Negotiations

Negotiation involves the participating parties being willing to accept a compromise between their ultimate goal and the basic minimum they may consider. The term "negotiation," presumes that both common interests and conflict exist between the two or more parties participating in the negotiation process. When two or more parties fail to resolve issues unilaterally, each side of the negotiation effort agrees to discuss issues and attempt to arrive at a mutually satisfactory agreement. William Wunderle (2007), MBA from Benedictine College; served extensively in the Middle East, explained in the article, "How to negotiate in the Middle East," that no one exclusive right way exists as a guide to negotiations. There are, however, "effective and less effective approaches that vary according to contextual factors. As negotiators understand that their counterparts may see things very differently than they do, they will be less likely to make negative judgments and more likely to make progress" (Wunderle, para. 26). In cross-cultural negotiations, as the parties belong to different cultures, they may frequently think, feel, and behave differently.

Conducting negotiations involves a three-phase process, Wunderle (2007) explained: 1) Pre-negotiation, 2) the negotiation, and 3) post-negotiation. During the typically most critical phase of the process, the…

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Campbell, D.J. & Craig, T. (2005). Organisations and the business environment. Oxford, UK:
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Taylor, T. (2005). In Defense of Outsourcing. The Cato Journal, 25(2), 367+. Retrieved February 21, 2010, from Questia database:
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