Technology substitution and standardization in telecommunication 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 be categorized in four ways: incremental, architectural, platform, and radical. 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. 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).