External Analysis of Telecommunications Industry in America - Research Paper Example

The threats to the industry can also be viewed from the perspective of Porter's five forces analysis in which case according to Amrollahi and Akhgar (2013), all the threats to all stakeholders in the industry are analyzed. Therefore, this section will make integration of these factors as far as the market is concerned. This gives an effective chance to view opportunities existing in it. It has also to be noted that America is a large region and there are some companies that can only provide their services to one state only while others serve quite a number of states in the country.

1.1 Political and Environmental Factors

            The political system of the USA has had very substantial control over the telecommunications industry. This existence involves regulation of the number of firms in the industry by the government to the outcomes of the information given to the public by the media firms. Since telecommunication involves a communication system consisting of different gadgets over a distance, the central and state governments have had drastic control over these. Moreover, these companies operate in different countries apart from the Americas but are still recognized as American companies (DellaVigna and Kaplan). This, according to the state government is done for the public interest.

Control of the media is done through a given number of ways among them censorship in which speech is suppressed depending on the perceived effects on those receiving this information. Censorship has always been done through the Federal Communication Commission. Many political factors have affected this industry to such an extent that some of the companies are wholly dependent on government legislation. One of the legislations is that of taking care of the environment. The American government is basing more emphasis on environmental issues. Disposal and care of wastes, as well as care of dangerous radioactive waves, have to be governed effectively so that the environment remains green. Moreover, some of the companies’ sources of raw materials are overseas nations that have different environmental rules. The companies have the obligation to take care of the environment or risk being removed from such markets.

Another political issue is the trade regulations and tariffs laws. Communications companies are not supposed to charge beyond a given level of tariffs for their services.  For instance, Verizon Inc. operates on the basis of low tariffs to all its customers because it operates on the basis of economies of scale in the creation of the new technologies which make it close out any threat of entry into the same area of production.