At the recent Financial Times Conference on Telecommunications and the European Business Market: the Perspectives for Change, two of the contributors examined the question of whether companies should “make” their own private telecommunications network, or “buy” a publicly-offered service.
The topic is not only interesting as a case study of “make or buy”, but is especially timely in the specific field of telecommunications in Europe. In June 1987, the European Commission issued its Green Paper on telecommunications liberalisation and rationalisation of Europe's equipment manufacturers. Current difficulties include national regulatory powers, cross subsidies, lack of common standards, and lack of agreement on standards, frequencies and tariff principles. Not least, rapid changes in the technology itself has turned telecommunications into a Strategic competitive asset for companies.
The two authors of these articles argue from slightly different perspectives; White as a major user developing into a provider, and Wilson as an adviser and provider. Both are convinced that the make or buy decision is an over-simplification; there are other, intermediate, options. Both agree that which ever decision is taken, it is likely to be the most important one in information technology that companies make in the next few years.
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