Notes

Obsolescence of Telecommunications


Fast paced technology and the invention of a lot of gadgets in the present times have caused the fast deterioration and obsolescence of many present devices. Our smart phones now may already be called outdated tomorrow. Telecommunications sector has always thought of ways to take part in the fast demand and growing development of the industry. However, the sector has never really conceived of ways to get with the flow of development.

One of the issues faced by obsolete telecommunications media is caused by scammers. Recent development software’s which should supposedly be paid have been cracked by hackers. Complaints have been filed by legitimate owners that a lot of applications have been provided for free with the same features as paid ones.

Axis Capital Group, the leading mobile data provider in Jakarta, Indonesia assures its subscribers that to be able to crack a code and to build networks and innovate quickly in telecommunications sector, one needs greater patience, skills, resources and experience which a lot of fraudsters lack in some respect. Fly-by-night telecommunications companies which promise to keep pace with the fast moving industry may not be able to keep that promise with tighter security measures.

Nevertheless, truth remains that time to market has accelerated greatly and large companies are willing to be beta-test customers for start-ups. Data has never been more easily available, especially with the growth of APIs, to leverage for value. It has never been faster and cheaper for technological innovators to start a company, and start-ups can become large companies in a very short period of time, thus, also the increase of competitors. Old companies who cannot keep up can also grow obsolete over time. Scammers may pose little threat but it is not the same issue for legitimate start-ups.

Telecommunication devices face the same problem. There are three major depreciation factors that can affect devices:

1. Physical Deterioration.
This is defined as the loss in utility and value due to some physical deterioration in the property. Physical deterioration is considered curable if the cost to cure it is equal to or less than the value added by curing it. Elements of total depreciation that are not physical deterioration must be some form of obsolescence.

2. Functional Deterioration
This is perhaps the most devastating depreciation factor. Since the market demand devices to be an extension of their life, more and more applications are installed. If your device can’t handle the apps needed, there is a big possibility that it can get undervalued soon.

3. External (or Economic) Obsolescence
The loss in utility and value caused by external negative influences outside the property itself. External obsolescence is typically incurable. External obsolescence can be either temporary (an oversupplied market) or permanent (for example, a change in regulatory requirements).