Vertical structure of the industry and competition: an analysis of the evolution of the info-communications industry

Jackie Krafft

Telecommunications Policy, vol. 27, issue 8-9, 625-649

Abstract: The purpose of this paper is threefold. First, the paper provides a synthesis of the potentialities and limits of the dominant economic literature on vertical contractual relations which essentially focuses on the impact of vertical specialization and vertical integration on competition and customers' welfare. Second, the paper proposes a characterization of the different degrees of vertical specialization and vertical integration for key actors in the info-communications industry: equipment suppliers, telcos, ISPs/IAPs, navigation and software/middleware companies, information and content companies. Thirdly, the paper acknowledges a confrontation between, on the one hand, optimal vertical structures exhibited in dominant economic models and, on the other hand, observed vertical structures in the info-communications industry. From this confrontation emerges an important gap between theoretical results and observable trends. The outcome of this paper is thus that the dynamics between vertical relationships and competition requires a new research agenda, especially for researchers concerned with the evolution of the info-communications industry.

Keywords: Vertical; relations; Competition; Info-communications; industry; Innovation (search for similar items in EconPapers)
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