90 Part I • Information Technology
almost as critical for a parts clerk at a Honda dealership in
Oregon dealing with a disgruntled customer. The parts
clerk can use his networked computer to check the avail-
ability of a needed part in Honda regional warehouses in
the United States and can immediately place the order
from the closest warehouse that has the part.
Sales support also means customer support.
Sometimes the online information describing product or
service characteristics and availability is made available
directly to the customer. In the last few years, instant mes-
saging (IM) has become an important tool for customer
support, especially for online retailers and Wall Street
stock and bond traders.
The Telecommunications Industry
There are three major segments of the telecommunications
industry: (a) carriers, who own or lease the physical plant
(cabling, satellites, cellular towers, and so forth) and sell the
service of transmitting communications from one location
to another; (b) equipment vendors, who manufacture and
sell a wide range of telecommunications-related equipment,
including LAN software and hardware, routers, hubs,
wireless access points, switches, multiplexers, cellular
telephones, and modems; and (c) service providers, who
operate networks and deliver services through the network
or provide access to or services via the Internet. In the
United States, the giant carriers are AT&T and Verizon
(including both Verizon Communications and Verizon
Wireless), with the other major players including Sprint
Nextel, T-Mobile (Germany), and Qwest. The major equip-
ment vendors include Alcatel-Lucent (France), Avaya,
Cisco Systems, Ericsson (Sweden), GENBAND, Juniper
Networks, Motorola, and Nokia (Finland). The service
providers include AOL, Comcast, Google, MSN from
Microsoft, Yahoo!, and a wide variety of ISPs.
As an important historical footnote, the entire com-
plexion of the telecommunications industry changed in 1984
with the breakup of AT&T into the long-distance telephone
and equipment-centered AT&T and the regional Bell operat-
ing companies (RBOCs). Although the various pieces that
resulted from the divestiture were still large, there was no
longer a single monolithic entity in control of most telecom-
munications in the United States. Just before the AT&T
breakup, technological developments in long-haul commu-
nications (e.g., microwave, satellites, and fiber optics) made
the development of long-distance networks to compete with
those of AT&T economically feasible. Thus came the rise of
MCI, Sprint, and other long-distance carriers.
The 1984 AT&T divestiture also had significant man-
agerial implications for the telecommunications function in
a user organization. Prior to 1984, the telecommunications
manager had a relatively easy job, dealing with AT&T for
almost all of his or her telecommunications needs and re-
ceiving high-quality, reliable service for a regulated price.
After divestiture, the job got much tougher. Now the manag-
er has to deal with a variety of carriers and equipment
vendors, and also has to make sure that all the various pieces
fit together.
In the 1990s, the growth of mobile telephony changed
the landscape, with the rise of new wireless telephone compa-
nies, sometimes independent and sometimes associated with
AT&T or one or more of the RBOCs. The recombining of the
RBOCs into larger entities also began in the 1990s, culminat-
ing with SBC’s merger with Ameritech in 1999 and the for-
mation of Verizon from GTE and Bell Atlantic in 2000. In
much of the world, the government-owned telephone carriers
shifted to private ownership in the 1990s. In the United States,
the Telecommunications Reform Act of 1996 resulted in
increased competition for telephone service (both voice and
data). Within limits specified by the act, the local telephone
companies, the long-distance telephone companies, and cable
television operators could now enter each other’s markets.
The twenty-first century is bringing even further
changes to the telecommunications industry. In 2004, the
number of cell phones in the United States passed the num-
ber of wired phones in homes. At the end of 2009, there
were roughly 280 million cell phones in the United States,
compared to 170 million wired home phones. The number
of smartphones in service was about 30 million, with that
number growing rapidly. The impact of Internet telephony
is huge, especially for the business marketplace.
The players in the telephone industry are changing as
well. In 2005, Verizon acquired long-distance player MCI,
and SBC pulled a major coup in acquiring AT&T (the long-
distance leader) and subsequently changed its name to AT&T.
Then in 2006, AT&T acquired BellSouth, one of the last two
RBOCs that had not already been swallowed up by Verizon
or AT&T. (The last remaining independent RBOC is Qwest.)
AT&T’s acquisition of BellSouth was doubly important be-
cause AT&T and BellSouth had jointly owned Cingular, the
nation’s number one wireless carrier at the time. Verizon
Wireless bought Alltel in 2008 for $28.1 billion to create a
wireless carrier even larger than AT&T (Meyerson and Giles,
2008). Nevertheless, the new AT&T is the leading provider of
wired home telephone service, the dominant supplier of
telecommunications services to U.S. businesses, and the sec-
ond largest wireless carrier. It seems that AT&T has been re-
built! There is a difference, however: This time there is anoth-
er giant, multifaceted telecommunications firm, Verizon, as
well as two other strong competitors in the wireless arena—
Sprint Nextel (which merged in 2005) and T-Mobile, growing
competition from cable providers offering telephone and
broadband services, and a number of other players. These are
exciting—and nerve-racking—times for companies in the
telecommunications industry and their customers.