Discussion on the necessity and path to build intelligent pipeline for telecom operator from economics perspective

A large number of Internet applications spawned by the IP based Internet have been rapidly eroding the traditional business of telecom operators in disruptive innovation business model. The traditional telecom operators have put forward the strategy of transformation, but the transformation is lack of theoretical analysis. By using Stackelberg economy analysis model, this paper deduced that it is not the optimal strategy for telecom operators to enter the Internet application. By using the strategy of Kaldor efficiency rather than Pareto efficiency, the operator provider should take transformation to build intelligent network to maximum the total efficiency. Furthermore, by contructing the intelligent network system, telecom operators should focus on the optimization of the transmission and control ability and large network computing, storage, dispatching ability. Finally the paper puts forward the suggestions of the mechanism to build intelligent pipeline.