Technology substitution and standardization in telecommunications services

Traditional studies on information technology (IT) substitution and standardization have focused mostly on products, standalone components or equipment interfaces. The dynamics of technology life cycle have rarely been considered and innovation has tended to be viewed mostly as a competitive tool or as an opportunity for new entrants. However, the context of interactions among markets, technologies and standards provides many clues regarding the evolution of service innovations in public telecommunication networks. In particular, by combining marketing and technological perspectives, it is possible to consider the discontinuities that the evolution of technologies can provoke, as well as the changes in the attributes used to rank services. With this approach, an innovation can he categorized in four ways: incremental, architectural, platform, and radical. In public telecommunication services, incremental innovations build on mature network technologies with improved M&Ps and/or new applications. Architectural innovations consist of sustaining networking technologies, improved OSSs and new applications. Platform innovations consist of improved networking technologies, OSSs and applications. Finally, radical innovations bring about the need for new Operation Support Systems (OSSs), new methods and procedures (M&Ps) and new applications. Process and architectural innovations are more readily integrated within the existing framework, both from the technological and financial viewpoints. For platform innovations, sales of network equipment can be a useful leading indicator for service evolution. This has several consequences. Firms, regulators and standards organizations should consciously link their marketing and standardization strategies to the various phases of the technology cycle. They should also be cognizant of the differences in the time scale and in the magnitude of this cycle among vendors and service providers. Lack of attention to these differences has caused vendor-led IT standardization to minimize the importance of responsive standards, even though effective management of end-to-end telecommunication services relies upon the cooperation of all those participating in the transmission of information. As a consequence, telecommunication carriers are now obliged to develop their own custom solutions to integrate the various proprietary OSSs that are used to operate modern networks. We illustrate these ideas with historical data for networks using the following protocols: X 25, frame relay and ATM (Asynchronous Transfer Mode).