Investing in telecommunications is inherently
 a business gamble. The technology is expensive, rapidly changing, and complex. The stakes increase as traditional marketplaces are changed by electronic delivery, as new markets open up, as some firms use communications successfully to reposition their business, and as others succeed only in creating expensive write-offs on the income statement. When a firm leads, it is betting on an unproven business idea and often on unstable technology. When it follows, it is betting that it will be able to catch up to the leaders.
Given the past gaps between promise and reality in such areas as home banking, office automation, expert systems, debit cards, videotex, videoconferencing, or on-line information services, most senior managers are skeptical about geewhiz technology. They prefer to wait a little and let someone else prove the market is there. What can they do, though, when a geewhiz business idea, based on proven technology, turns out to be a winner? The technology creates a barrier to imitation. Since catch-up time is measured in years, the firms that lack the telecommunications base are locked out.
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