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Cross-Sector Competition in Telecommunications

An Empirical Analysis of Diversification Activities

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Abstract

Cross-sector competition in the information and communications technology sectors (ICT sectors) constitutes a key strategic challenge for telecommunications companies. Due to increasing convergence, value creation is resulting in a greater degree of interaction. The diversification potential of telecommunications businesses is therefore changing with respect to associated ICT sectors, such as hardware, software and media.

The article analyses cross-sector competition in the telecommunications industry on the basis of the diversification activities of ICT companies. A concentration of competitive interdependence in the ICT sectors is demonstrated using a cluster analysis of 34,142 companies. The cross-sector activities of telecommunications companies are investigated using contingency and dependency analyses, and the diversification-related competition in the telecommunications sector is also analysed. With regard to the telecommunications sector, particularly high level cross-sector competition with the media industry is identified, as well as strong diversification activities in the software sector. The results are used to derive the potentials and risks that have a significant bearing on the structure of the cross-sector competitive environment of telecommunications companies.

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Notes

  1. A description of SIC class and sector allocation can be found in Tables 5 and 6 of the appendices (available online).

  2. The degree of association of all sectors is given in the appendices in Table 8.

  3. Figure 2 in the appendices shows the dependence of Clustering Coefficient on Cluster Number. Table 7 in the appendices shows the dependence of the Clustering Coefficient on the number of clusters and the respective difference to the previous value.

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Correspondence to Jochen Wulf.

Additional information

Accepted after three revisions by Dr. Bub.

This article is also available in German in print and via http://www.wirtschaftsinformatik.de: Wulf J, Zarnekow R (2011) Branchenübergreifender Wettbewerb in der Telekommunikation. Eine empirische Analyse von Diversifikationsaktivitäten. WIRTSCHAFTSINFORMATIK. doi: 10.1007/s11576-011-0289-8.

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Appendices SIC class and sector allocation (PDF 118 kB)

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Wulf, J., Zarnekow, R. Cross-Sector Competition in Telecommunications. Bus Inf Syst Eng 3, 289–298 (2011). https://doi.org/10.1007/s12599-011-0177-1

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