Research on disruptive innovations as a driving factor for the economic development of a telecommunication operator

Abstract

3 Abstract The evolution of the telecommunications industry from a sector driven by technology to a business model driven by the needs of end consumers is a fact over the past few years. Telecommunication operators are in a situation that they have to balance the need to introduce new products and services on the one hand, and to reduce the cost of investment and operation on the other. This is considered as the beginning of consequent trends that reflect the dynamic development of the telecommunications industry and the telecommunications networks as a whole. And here comes question, what would be the main drivers of development within this industry in the coming years? Up to now there is a strong indication that convergence of networks and telecommunication technologies would be the main drivers for radical changes in the industry. But are there are facts that are proving this expectations? The staring point is the consideration that an important role in this transformation will be played by so-called "Radical" or "Disruptive innovation", meaning that developed of a new product or result (scientific and applied) displaces the existing product or market due to implementation of a totally new approach or a technology. What is most important is that this radically new innovation should be accepted by the customers and recognized by them as a valuable product or service. In this regards, an overview of the innovation as a driving force in radical technological aspect during the last couple of years in the industry is provided. The analysis combines the -what- and -why- of the identified innovative radical models, which have been successfully commercialized according to the respondents being part of this research, meaning that the embedded technology is able to recover its investment within the time and of those who had failed to do so. Further investigation on the reasons why these technologies have not been widely implemented or are not justified economically expected of them is done by identifiying how important was the technology for the customer acceptans of the innovation. Based on the analysis an oucome about what are the business and technological characteristics of these technologies, which may form an important set of parameters for radical innovations in telecommunications. This hypothesis was tested by appropriate studies of the value chain of telecommunications operators or companies, which will provide a link between theory and industry. As an absolute necessity was the participation of representatives from Telecommunication operator, Telecommunication vendor, 4 Telecommunication integrator and Over-the-Top provider of alternative services to the offered by the telecommunication operator. - vision for development of telecommunication technologies and networks based on identified parameters is to be suggested. As an outcome some of the trends were verified like those that Telecom vendors are still the main partner for the Telecom operator in the process of delivering innovative products and services. Also it was proved by the research that the groups that are more focused in changing radically the industry are the Telecom vendors and the newcomers like Over-the- Top providers. What is interesting to be highlighted is that there is a slight movement from Telecom operators- point of view into a direction of radical innovations that appeared as a result from the conducted research as well. Another important consideration is that Over-the- Top providers and Telecom vendors have almost one and the same investment-to-profit ratio, while the first group is able to achieve it with higher investment compare to the second group. Within this thesis the executed analysis is reduced to the needed base for setting some future researches. One recommendation in this direction is the extension of representatives from other bodies, part of telecommunication value chain that could effect the process of innovation. Such examples are regulation and standardization bodies, but some more recommendations in continuing the future investigations had been made.