**2.2. The types of telecommunication service products**

In the Federal Law of the Russian Federation "On the Communications," the communication services are treated as the activities for receiving, processing, storing, transferring, and delivering of the messages by electricity connections or postal items. According to the all-Russian classifier of economic activity types, these services are included in the section "The activity in the field of the electricity connection" (Code 64.2 in the classifier of economic activity types, OKVED). In the conditions of the rapid development of information, electronic and digital technologies, the services in the field of the electricity connection are increasingly beginning to be considered as telecommunication services.

The term "telecommunications" comes from the Latin word "communico," which means "the form of communication," and from the Greek word "tele," which means "acting at a great distance." To date, telecommunications is a complex of methods for the transfer of information, which is based on the transmission and transformation of electromagnetic signals. From a technical point of view, the main type of a good produced by the telecommunications industry is the exchange of information at remote (and near) distances, which can take place in different forms, depending on the mode of transmission, the type of channel, and the type of signal.

From the economic point of view, the telecommunication service can be described by the benefits to the consumer. Such benefits are reflected in the attributes of the service [13]. The multiattributivity of the mobile communication service is shown in **Table 5**.

By selecting and combining the most important attributes for consumers, the telecommunication services provider attracts attention to them, forming a demand from potential customers. Depending on the predicted primary utility of a certain consumer segment, the values indicated in **Table 5** will be either invariant or variable.

The interdependence of the components of the service telecommunications product is manifested (in accordance with the neoclassical economic theory) in two aspects: interchangeability and complementarity.

The development of one of the mutually complementary services in the telecommunications market ensures the activation of the demand for another service. Therefore, the drivers of the demand for SIM-cards of mobile operators at first were the voice services, then short messages without the need for an immediate response (SMS), and finally, mobile Internet traffic. However, it should be noted that the more and more subscribers start to use the special applications for data transfer, as the cost of traffic (megabytes) is cheaper than standard calls and SMS. The active development of wi-fi networks with free access replaces paid mobile Internet services. The market of these services, in particular the market of mobile communication services, is a network market [14]. This fact is of a significant importance for the formation of the usefulness of the telecommunication services. This means that the utility of the service on the network market depends on its prevalence among the potential consumers. The positive external effect from the introduction of a new service or a new service product on the network market

The primary and secondary perceived utilities of the telecommunication services product components can vary from one group of consumers to another. To cover a larger number of

can be a result [15].

**No Title Content**

2 The range of services provided by the

5 Strategies for interaction with the consumers of services (CRM)

**Table 5.** The mobile service attributes.

mobile operator

1 The technical quality of communication • The quality of the voice transfer

3 The level of consumer costs (tariffs) • The differentiation of tariff plans

4 The billing • The update rate of the balance

Note: compiled on the basis of the research data of the agency UMG–International.

• The reliability and the speed of delivery of messages

http://dx.doi.org/10.5772/intechopen.79030

9

• The breadth of coverage in the place of residence of the

• The convenience of replenishment of the account and payment

• Accuracy and correctness of withdrawal of money from the

• A list of services that can be obtained through the automatic

• Availability and convenience of the call-center services

• The volume and methods of information providing

• The reliability in obtaining the necessary services • The ease of activation, use and cancelation of services

• The opportunity to call at any time

Customization of the Telecommunication Market Based on the Application of the Concept…

consumer and other settlements

• The simplicity and clarity of tariff plans • The total cost of mobile communications

for the provided services

• Availability of loyalty programs

menu on the website

account

• The differentiation of the services

The prerequisite for the interchangeability of the telecommunication services is the availability of various ways of the information conveying. Therefore, to send a message, it is possible to use a direct call, send an SMS or MMS message, write a letter by e-mail, leave a message in your voice mail, and so on.

The interchangeability of some ways of the information conveying leads to the emergence of new services on the market with improved quality parameters and to the decrease in the demand for traditional services. According to the reporting of telecommunication companies, the number of fixed telephony subscribers in Russia decreased by 0.8–1.0 million people per year in the period 2010–2013. More than 1.8 million subscribers refused to use mobile telephony services in 2015. The factor of pressure on the price of calls in the network of mobile operators, especially on the price of long-distance and international calls, is the VoIP system, which ensures the transmission of the voice signal over the Internet [2].


**Table 5.** The mobile service attributes.

**2.2. The types of telecommunication service products**

8 Telecommunication Networks - Trends and Developments

to be considered as telecommunication services.

cated in **Table 5** will be either invariant or variable.

ity and complementarity.

your voice mail, and so on.

of signal.

In the Federal Law of the Russian Federation "On the Communications," the communication services are treated as the activities for receiving, processing, storing, transferring, and delivering of the messages by electricity connections or postal items. According to the all-Russian classifier of economic activity types, these services are included in the section "The activity in the field of the electricity connection" (Code 64.2 in the classifier of economic activity types, OKVED). In the conditions of the rapid development of information, electronic and digital technologies, the services in the field of the electricity connection are increasingly beginning

The term "telecommunications" comes from the Latin word "communico," which means "the form of communication," and from the Greek word "tele," which means "acting at a great distance." To date, telecommunications is a complex of methods for the transfer of information, which is based on the transmission and transformation of electromagnetic signals. From a technical point of view, the main type of a good produced by the telecommunications industry is the exchange of information at remote (and near) distances, which can take place in different forms, depending on the mode of transmission, the type of channel, and the type

From the economic point of view, the telecommunication service can be described by the benefits to the consumer. Such benefits are reflected in the attributes of the service [13]. The

By selecting and combining the most important attributes for consumers, the telecommunication services provider attracts attention to them, forming a demand from potential customers. Depending on the predicted primary utility of a certain consumer segment, the values indi-

The interdependence of the components of the service telecommunications product is manifested (in accordance with the neoclassical economic theory) in two aspects: interchangeabil-

The prerequisite for the interchangeability of the telecommunication services is the availability of various ways of the information conveying. Therefore, to send a message, it is possible to use a direct call, send an SMS or MMS message, write a letter by e-mail, leave a message in

The interchangeability of some ways of the information conveying leads to the emergence of new services on the market with improved quality parameters and to the decrease in the demand for traditional services. According to the reporting of telecommunication companies, the number of fixed telephony subscribers in Russia decreased by 0.8–1.0 million people per year in the period 2010–2013. More than 1.8 million subscribers refused to use mobile telephony services in 2015. The factor of pressure on the price of calls in the network of mobile operators, especially on the price of long-distance and international calls, is the VoIP system,

multiattributivity of the mobile communication service is shown in **Table 5**.

which ensures the transmission of the voice signal over the Internet [2].

The development of one of the mutually complementary services in the telecommunications market ensures the activation of the demand for another service. Therefore, the drivers of the demand for SIM-cards of mobile operators at first were the voice services, then short messages without the need for an immediate response (SMS), and finally, mobile Internet traffic. However, it should be noted that the more and more subscribers start to use the special applications for data transfer, as the cost of traffic (megabytes) is cheaper than standard calls and SMS. The active development of wi-fi networks with free access replaces paid mobile Internet services.

The market of these services, in particular the market of mobile communication services, is a network market [14]. This fact is of a significant importance for the formation of the usefulness of the telecommunication services. This means that the utility of the service on the network market depends on its prevalence among the potential consumers. The positive external effect from the introduction of a new service or a new service product on the network market can be a result [15].

The primary and secondary perceived utilities of the telecommunication services product components can vary from one group of consumers to another. To cover a larger number of potential consumers, the companies that participate in the formation of the telecommunication service products use several strategies:

If the main service provided by the company is the connection of a telephone, the Internet or a pay-TV, then the customer support, payment methods, etc. can be considered as the auxiliary services, and the training, the provision of information materials, etc., can be considered as

Customization of the Telecommunication Market Based on the Application of the Concept…

http://dx.doi.org/10.5772/intechopen.79030

11

The main advantage of the technology of the package sales is that the provision of a services package reduces sales costs due to economies of scale and the ability to use the discounts that exist in the company. Therefore, it is not necessary to reduce further the cost of telecommunications services. Therefore, this technology can be considered a non-price tool to increase the

It is important to understand that from the positions of the customer and the performer of the telecommunication service product the designation of its components is not the same (**Table 6**), so that modern companies operating in the telecommunication services market, offering service packages of different substantive content, in some cases be combined with

The data in **Table 6** confirm that the basis of the packet sales technology in relation to the internal telecommunication service products is detailed elaboration of proposals for the formation of packages of services with a justification of their composition for a variety of condi-

The inclusion of telecommunication services to external in terms of resources telecommunication service products due to their dependence from the technology development, causing the improvement of the material components of the service product—devices and equipment (hard) and information and network infrastructure (soft). Thus, the external in terms of resources telecommunication service products include not only telecommunication companies' services but also products of the electronic industry and other industries, as well as the results of operations

Many achievements in the field of microelectronics, computer technology, space research, new material technologies and many others are immediately used to form new and to improve

**On the part of the telecommunication services customer On the part of the telecommunication services** 

**provider**

the consumers

1. The main service for which the company-

2. The auxiliary services that technologically support the implementation of the main service; 3. The supporting services aimed at attracting of

operator enters the market;

for the development of software and databases for the functioning of social networks.

supporting services.

customer loyalty.

each other [18].

2. The additional services:

of the service,

when paying for the basic service.

tions (for different groups of customers).

1. The basic service that has the primary utility for the consumer,

• compulsory, providing a standard level of technical quality

• optional, focused on the individualization of the supply, 3. The accompanying services that create an increased level of consumer comfort in accordance with the customer's strategy, 4. The derived services, access to which the consumer receives

**Table 6.** The structure of the telecommunication service product.


The service products from the point of view of the telecommunications industry participation in them can be divided into three types:


Let us consider each type of service product in detail.

To characterize the internal telecommunications service products, the service package model [16] and the corresponding batch sales technology [17] can be applied.

In accordance with this approach, the product of the telecommunications industry is provided as a set of different services, which together form the aggregate service product, including (from the manufacturer's point of view).


If the main service provided by the company is the connection of a telephone, the Internet or a pay-TV, then the customer support, payment methods, etc. can be considered as the auxiliary services, and the training, the provision of information materials, etc., can be considered as supporting services.

potential consumers, the companies that participate in the formation of the telecommunica-

• the mobile device manufacturers supply them with numerous unified sets of built-in applications, giving the possibility to the consumer to expand these sets, individualizing the

• the mobile communication service operators, based on a constant analysis of the market situation of telecommunications services, differentiate the offer through the implantation

• the companies that provide other types of services using digital technologies and develop new services, for example, electronic store, electronic reservation system, mobile bank,

The service products from the point of view of the telecommunications industry participation

• internal, covering the products and services produced by enterprises and organizations of the telecommunications industry, for example, the services packages of mobile operators; • external in terms of resources, including the necessary material elements, produced, in particular, by enterprises of the electrotechnical industry, for example, mobile phones, tablets,

• external in terms of the target function that assumes that the consumer uses the telecommunication services product as a means of access to some basic good or service, for example, opening a deposit through a mobile bank or booking a table in a restaurant through a

To characterize the internal telecommunications service products, the service package model

In accordance with this approach, the product of the telecommunications industry is provided as a set of different services, which together form the aggregate service product, includ-

• auxiliary services that promote the consumption of the main service, so without them, the

• supporting services aimed at increasing the attractiveness of the main service for consumers and creating the prerequisites for forming a competitive advantage of the company

• the main service for the providing of which the company-operator enters the market;

of various combinations of homogeneous products into different tariff plans;

tion service products use several strategies:

10 Telecommunication Networks - Trends and Developments

consumption;

mobile television, etc.

computers, etc.;

mobile operator.

offering them.

in them can be divided into three types:

Let us consider each type of service product in detail.

ing (from the manufacturer's point of view).

package cannot be sold to the consumer;

[16] and the corresponding batch sales technology [17] can be applied.

The main advantage of the technology of the package sales is that the provision of a services package reduces sales costs due to economies of scale and the ability to use the discounts that exist in the company. Therefore, it is not necessary to reduce further the cost of telecommunications services. Therefore, this technology can be considered a non-price tool to increase the customer loyalty.

It is important to understand that from the positions of the customer and the performer of the telecommunication service product the designation of its components is not the same (**Table 6**), so that modern companies operating in the telecommunication services market, offering service packages of different substantive content, in some cases be combined with each other [18].

The data in **Table 6** confirm that the basis of the packet sales technology in relation to the internal telecommunication service products is detailed elaboration of proposals for the formation of packages of services with a justification of their composition for a variety of conditions (for different groups of customers).

The inclusion of telecommunication services to external in terms of resources telecommunication service products due to their dependence from the technology development, causing the improvement of the material components of the service product—devices and equipment (hard) and information and network infrastructure (soft). Thus, the external in terms of resources telecommunication service products include not only telecommunication companies' services but also products of the electronic industry and other industries, as well as the results of operations for the development of software and databases for the functioning of social networks.

Many achievements in the field of microelectronics, computer technology, space research, new material technologies and many others are immediately used to form new and to improve


**Table 6.** The structure of the telecommunication service product.

functioning technical and computing facilities, communication networks [19]. All this contributes to the emergence of new information technologies and meeting the needs for telecommunication services. Manufacturers of mobile devices determine the rate of development and modernization of the telecommunication services market because they supply the base stations, controllers and switching centers for cellular operators. For example, in Russia, the equipment for "Megafon" is mainly supplied by Nokia and Siemens; for "VimpelCom" –by Alcatel, Sony, Nokia; for MTS–by Siemens, Sony, Motorola.

Expediency of functioning on the market of the external in terms of the target function telecommunication service products is caused by infrastructural function of telecommunications

Customization of the Telecommunication Market Based on the Application of the Concept…

http://dx.doi.org/10.5772/intechopen.79030

13

The telecommunications sector permeates in the modern conditions virtually all areas of the economic activity plays a leading role in the productions processes organizing, improving the efficiency of public administration, solving of security problems, and so on. This trend will increase with the development of the digital economy, which is based on the means of communications. The consumers will need not only the transfer of information in itself, as access to the various platforms and services in the electronic form. Hence, the development of the external in terms of the target function telecommunication service products is associated with

The most important difference between the types of service products being considered from the other two types of service products is that the primary utility for the consumer can be associated with any service provided by digital technologies. The digital technology is a fusion of information technology and telecommunications. Telecommunication services that generate secondary utility can be a part of the additional, accompanying or derivative services. It will

A special place in the external in terms of the target function telecommunication service products is occupied by financial services. In this case, the integration of two infrastructure functions is realized. The result of this process is the transfer of information for the movement of electronic funds, implying a change of their owner (e.g., in the case of payment for goods or

The integrated component of the service product in this area is mobile banking as well as various payment systems. According to OKchanger.ru, the most popular payment systems

The modern telecommunications companies have a direct impact on the customization of the service products of all types. This problem is discussed in the next section of the chapter.

**The role of the** 

passenger transport on-line registration service derivative

**Table 8.** The examples of the structure of the external in terms of the target function telecommunication service products.

**telecommunication services in the secondary utility**

on-line services of the goods orders and their tracking

on-line booking service additional (optional)

the service at the pharmacy electronic queue additional (mandatory)

**The type of the** 

accompanying

**the service product**

**telecommunication services in** 

depend on the generated service product and the customer preferences (**Table 8**).

services) or a change of their forms (e.g., in the situation of the credit deal).

are PayPal (24.32% user voices), Perfect Money (14.47%) and Payeer (11.74%).

the distribution of tickets for the entertainment

in relation to other economy branches.

the process of digitalization of the services.

**No The primary utility The type of the economic activity**

events

services

3 Purchase of a good e-commerce, logistics

1 Acquisition of the right to receive the

2 Acquisition of the right to receive services

4 Reception of the service

service

According to Cisco's data, by 2017, about two-thirds of the world's mobile traffic falls to the share of smartphones (Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2012–2017). Monthly traffic volumes per device increase from 342 to 2660 MB over the same period. From 2012 to 2017, the average speed of the mobile channel increases 7.4 times, and the average connection speed for smartphones and tablets increases 3.2 times. One of the main factors of this increase is the improvement of the technical characteristics of mobile devices.

The social networks are the main driver of the growth of mobile VoIP services. VoIP services are increasingly being built into the social networking applications that provide economic benefits for making international and long distance telephone calls, as well as for creating the distributed corporate telephone networks (**Table 7**).

Depending on the specifics of the formation of external in terms of resources telecommunication service products, the commodity policy of telecommunications companies should include the planning of an assortment of telecommunications equipment, without which it is impossible to provide the corresponding services. This allows not only to demonstrate the quality of service in the company but also to strengthen the "material component" of the service.

Some examples of the external telecommunications service products are as follows:

• sale of SIM-cards with USB-modems, telephone sets, routers and other equipment under the brand of a mobile operator,



**Table 7.** The most common IP telephony services (VoIP).

Expediency of functioning on the market of the external in terms of the target function telecommunication service products is caused by infrastructural function of telecommunications in relation to other economy branches.

functioning technical and computing facilities, communication networks [19]. All this contributes to the emergence of new information technologies and meeting the needs for telecommunication services. Manufacturers of mobile devices determine the rate of development and modernization of the telecommunication services market because they supply the base stations, controllers and switching centers for cellular operators. For example, in Russia, the equipment for "Megafon" is mainly supplied by Nokia and Siemens; for "VimpelCom" –by

According to Cisco's data, by 2017, about two-thirds of the world's mobile traffic falls to the share of smartphones (Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2012–2017). Monthly traffic volumes per device increase from 342 to 2660 MB over the same period. From 2012 to 2017, the average speed of the mobile channel increases 7.4 times, and the average connection speed for smartphones and tablets increases 3.2 times. One of the main factors of this increase is the improvement of the technical characteristics of

The social networks are the main driver of the growth of mobile VoIP services. VoIP services are increasingly being built into the social networking applications that provide economic benefits for making international and long distance telephone calls, as well as for creating the

Depending on the specifics of the formation of external in terms of resources telecommunication service products, the commodity policy of telecommunications companies should include the planning of an assortment of telecommunications equipment, without which it is impossible to provide the corresponding services. This allows not only to demonstrate the quality of

• sale of SIM-cards with USB-modems, telephone sets, routers and other equipment under

up to 10 people

with Viber installed

• Application for group chat (Chat)

• Provision of video communication and videoconferences

• Application for group video communication (Meet)

• Making free calls in high quality between smartphones

• Making calls to ordinary and mobile phones at low rates

• sell the service "Internet access" with modems under the brand of an Internet provider.

service in the company but also to strengthen the "material component" of the service.

Some examples of the external telecommunications service products are as follows:

1 Skype–messenger, including on mobile platforms • Making and receiving calls to ordinary phones

**No Service name Features and possibilities**

Alcatel, Sony, Nokia; for MTS–by Siemens, Sony, Motorola.

12 Telecommunication Networks - Trends and Developments

distributed corporate telephone networks (**Table 7**).

the brand of a mobile operator,

2 Google Hangouts–service for business

Source: http://www.voipoffice.ru.

3 Viber–mobile VoIP application for iPhone, integrates into the address book

communications, including on mobile platforms

**Table 7.** The most common IP telephony services (VoIP).

mobile devices.

The telecommunications sector permeates in the modern conditions virtually all areas of the economic activity plays a leading role in the productions processes organizing, improving the efficiency of public administration, solving of security problems, and so on. This trend will increase with the development of the digital economy, which is based on the means of communications. The consumers will need not only the transfer of information in itself, as access to the various platforms and services in the electronic form. Hence, the development of the external in terms of the target function telecommunication service products is associated with the process of digitalization of the services.

The most important difference between the types of service products being considered from the other two types of service products is that the primary utility for the consumer can be associated with any service provided by digital technologies. The digital technology is a fusion of information technology and telecommunications. Telecommunication services that generate secondary utility can be a part of the additional, accompanying or derivative services. It will depend on the generated service product and the customer preferences (**Table 8**).

A special place in the external in terms of the target function telecommunication service products is occupied by financial services. In this case, the integration of two infrastructure functions is realized. The result of this process is the transfer of information for the movement of electronic funds, implying a change of their owner (e.g., in the case of payment for goods or services) or a change of their forms (e.g., in the situation of the credit deal).

The integrated component of the service product in this area is mobile banking as well as various payment systems. According to OKchanger.ru, the most popular payment systems are PayPal (24.32% user voices), Perfect Money (14.47%) and Payeer (11.74%).

The modern telecommunications companies have a direct impact on the customization of the service products of all types. This problem is discussed in the next section of the chapter.


**Table 8.** The examples of the structure of the external in terms of the target function telecommunication service products.
