A Dynamic Macroeconomic Model for the Us Telecommunications
A Dynamic Macroeconomic Model for the US Telecommunications Industry1
Elias Aravantinos, Stevens Institute of Technology, Wesley J. Howe School of Management, Hoboken, NJ, USA2 Dr. Fotios Harmantzis, Stevens Institute of Technology, Wesley J. Howe School of Management, Hoboken, NJ, USA ABSTRACT Dynamic models have been used in most businesses serving different purposes. The increased changes of the Telecommunications environment have created a dynamic industry emerging new dynamic economic models. We investigated the Telecom industry by conducting macroeconomic and infrastructure analysis. However, this paper uses recent data from the Telecommunications industry to reveal the infrastructure trends and predict the US wireless growth. The analysis is focused on several factors such as the infrastructure described by the Teledensity, the employment and the Telecom revenues in comparison with the Gross Domestic Product (GDP). The purpose of this analysis is to understand the industry’s behavior during a specific period of time, 1984-2003, propose an appropriate economic dynamic model, wireless oriented that identifies the current driving forces and detects the impact of some critical events and trends. Keywords: Dynamic Economic Model, Macroeconomic Analysis, Telecom Act, Teledensity INTRODUCTION The US Telecommunications sector is going through several changes (Fransman 2002). The first and fundamental reason is the rapid technological change in the Telecommunications and computer-based services. The Telecommunication Act which follows is the most important event in Telecom that established a new era with changes and surprises for the Telecom incumbents. The 1996 Act, took about six years to pass without including the numerous follow-up rule-makings (Noam 2002). The intent of the 1996 Act was to promote competition and the public interest, on the fundamental assumption that competitive markets would emerge. Economides (Economides 2004) is pointing out the major
Elias Aravantinos, Stevens Institute of Technology, Wesley J. Howe School of Management, Hoboken, NJ, USA2 Dr. Fotios Harmantzis, Stevens Institute of Technology, Wesley J. Howe School of Management, Hoboken, NJ, USA ABSTRACT Dynamic models have been used in most businesses serving different purposes. The increased changes of the Telecommunications environment have created a dynamic industry emerging new dynamic economic models. We investigated the Telecom industry by conducting macroeconomic and infrastructure analysis. However, this paper uses recent data from the Telecommunications industry to reveal the infrastructure trends and predict the US wireless growth. The analysis is focused on several factors such as the infrastructure described by the Teledensity, the employment and the Telecom revenues in comparison with the Gross Domestic Product (GDP). The purpose of this analysis is to understand the industry’s behavior during a specific period of time, 1984-2003, propose an appropriate economic dynamic model, wireless oriented that identifies the current driving forces and detects the impact of some critical events and trends. Keywords: Dynamic Economic Model, Macroeconomic Analysis, Telecom Act, Teledensity INTRODUCTION The US Telecommunications sector is going through several changes (Fransman 2002). The first and fundamental reason is the rapid technological change in the Telecommunications and computer-based services. The Telecommunication Act which follows is the most important event in Telecom that established a new era with changes and surprises for the Telecom incumbents. The 1996 Act, took about six years to pass without including the numerous follow-up rule-makings (Noam 2002). The intent of the 1996 Act was to promote competition and the public interest, on the fundamental assumption that competitive markets would emerge. Economides (Economides 2004) is pointing out the major