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Telecommuications Overview

The telecommunications industry provides services that facilitate user-to-user communication and comprises various sub sectors such as internet service, telephone communications, device vendors and infrastructure. Following the development of 5G network cellular network infrastructure, which is expected to greatly increase the speed and volume of internet communications, the sector is anticipating high growth in the internet service and infrastructure sub sectors. The ability of the network to handle larger network demands is expected to complement the development of related applications such as cloud computing, Internet of Things and edge computing, leading to a stronger demand for internet and increasing overall profitability within the industry.

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Given the costs of maintaining such infrastructure and network services, the telecom industry is usually populated by a small number of large telecom firms, with the addition of other smaller firms providing a variety of value-added services. Large players in the industry also tend to be geographically restricted to the bounds of infrastructure, giving them geographical monopolies in the area. To avoid price competition which has become more prevalent between telecom companies in recent years, successful telecom companies are faced with the challenge of personalizing their services to a large variety of customers. The industry is also strongly affected by regulation with regards to net neutrality – telecom firms have to be wary of charging additional fees for access to certain sites and abide by net neutrality regulations which have become more stringent across the years.

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