Telecommunications Industry - Essay Example

Popular link protocols for local area networks (LANs) appeared in the 1970s. AT&T was the first biggest telecommunications company. In 1913, AT&T committed to dispose its telegraph stock. The Telecommunication Act of 1996 changed the regulation and opened the market for competition. AT&T continued to act as the leader, establishing standards for others to follow. In 2000s, the telecommunication industry saw a lot of mergers and reorganizations. Bell Atlantic and GTE combined to form Verizon. Lucent Technologies hived off its enterprise solution group into a new company.

Cisco, Nortel Networks, and DSL started making names in voice and data communications and the Internet business. The telecommunications industry is growing at a fast pace. New technology is bringing in new opportunities, and telecommunication companies are catching up fast. The convergence of the computer, Internet, and cellular phones, along with the increased access options through fiber optic, wireless, satellite, and DSL is leading to a continuously connected global community. Information exchange takes place with the push of a button, and the most remote locations are now accessible through the satellite or cellular.

This high speed growth is creating new companies, which are further getting merged into the major telecom entities. Some of the large Some of the largest international telecommunications companies known for innovative technology and products are AT&T, British Telecom, Deutsche Telekom, NTT, SBC Communications, Verizon Communications, Vodafone, and WorldCom.Venture Capital and Start-up Financing ActivitiesVenture Capital (VC) investment is when a third party takes equity in a company. A strong, self-sustaining, and vibrant VC industry is a critical factor to create an enterprise culture in which emerging entrepreneurs get encouragement to take risks and build successful businesses.

Private sector funding is crucial to enable government policies. Venture capitalists have always backed the high potential telecommunications business. The top VCs, as listed in Forbes.com include Promod Haque (Norwest Venture Partners), Vinod Khosla and Tom Perkins (Kleiner Perkins Caufield & Byers), David Strohm (Greylock), Lawrence Sonsini (Wilson Sonsini Goodrich & Rosati), and Paul Chamberlain (Morgan Stanley). One of the most successful VC backed start up company would be Cisco Systems (Mayer and Kenney 2004).

Industry StatisticsThe VC industry plays a major role in the U.S. economy. In 2007, USA saw a VC investment of $29.4 billion in 3,813 deals. The investment in telecommunication industry stood at $2.1 billion dollars from 290 deals, though it decreased from $2.6 billion (301 deals) in 2006. As against this, the Life Sciences sector (Biotechnology and Medical Device industries together) received a VC investment of $9.1 billion in 2007 (862 deals). Software investing was flat at $5.3 billion in 905 deals.

Internet-specific companies got $4.6 billion from 748