Antecedents and patterns of indirect distribution of telecommunications services: the case of France Telecom

At the time when telecommunications were essentially concerned with the traditional voice telephony, telecommunications companies were characterised by a vertically integrated model, integrating network provision, service provision and the distribution of services. The combined trends of market liberalisation and convergence with computing and media, has given birth to a wide range of new services and applications and induced a network configuration of this industry. In particular, new forms of indirect distributions have emerged, ranging from plain distribution to high value added activities, such as solution provision. In this paper, we analyse the antecedents of the rise of new forms of distribution and relate them to the various patterns that have emerged. In the first section, we identify the marketplace change that caused the emergence of indirect distribution in the telecommunications services industry, such as change in supply, demand, economic context and regulation. In the second section, we analyse the case of the French market from the perspective of the main incumbent, France Telecom. We conclude by relating this case to a more general trend of distribution restructuring in business markets.