Threat of New Entrants
The threat of new entrants in the industry limited to theUnited Statesis low due to the established companies having vast experience and power in the industry as well as the technical, monetary capital and human resource capital which is required for operating in the industry. However if the threat of new entrants is to be assumed on a global scale then it is emerging as the markets of China, and India have growing telecommunication companies that have experience in operating in diverse markets (‘Industry Profile: Global Fixed Line Telecoms’, 2007)
Threat of New Substitutes
The threat of substitutes in the telecommunication industry is high due to the technological changes and the advancements taking place in the communication technology, specially the internet.
There are many companies operating in the telecommunication industry both on the fixed line and on wireless operations. This makes the industry very competitive (‘Industry Profile: Global Fixed Line Telecoms’, 2007). In the US the rivalry is very strong while in the countries where massive growth is taking place in the industry, the rivalry in the industry is limited (‘Industry Profile: Wireless Telecommunication Services in the United States’, 2008).