Turbulence and Knowledge in Telecommunications: an Assessment of the French Case (1997-2002)

The experience of competition in telecommunications is relatively recent in Continental Europe, and especially in France. In this paper, we argue that there is nevertheless sufficient space to outline some key characteristics of entry and exit both in fixed and mobile telecommunications. Moreover, turbulence appears today as one of the main issues in the field of empirical industrial dynamics. We think that the analysis of entrants in telecommunications and their potential adaptation in a global context of shakeout can refine our common understanding of entry and survival, especially by validating and eventually revising basic stylized facts and results available in the recent economic literature. Telecommunications is an industry whose dynamics is essentially driven by the creation, accumulation, and destruction of knowledge; and telecommunications is also an industry engaged in a highly turbulent trajectory. This paper focuses thus on these two key features of the telecommunications industry – turbulence and knowledge – and provides an assessment of the French case over the period 1997-2002. The purpose of the paper is twofold. Firstly, this paper is dedicated to characterize major features of entry and exit in the French telecommunications industry by a collection of data and case studies on entrants and to see what kind of knowledge was determinant in explaining these turbulence mechanisms. Secondly, the paper is aiming at comparing basic stylized facts emphasized in recent surveys on entry with what occurs with entrants in the French telecommunications industry.