Home > Encyclopedia of Business and Finance > Telecommunications

Telecommunications is the transmission of data and information between computers using a communications link such as a standard telephone line. Typically, a basic telecommunications system would consist of a computer or terminal on each end, communication equipment for sending and receiving data, and a communication channel connecting the two users. Appropriate communications software is also necessary to manage the transmission of data between computers. Some applications that rely on this communications technology include the following:

1. Electronic mail (e-mail) is a message transmitted from one person to another through computerized channels. Both the sender and receiver must have access to on-line services if they are not connected to the same network. E-mail is now one of the most frequently used types of telecommunication.
2. Facsimile (fax) equipment transmits a digitized exact image of a document over telephone lines. At the receiving end, the fax machine converts the digitized data back into its original form.
3. Voice mail is similar to an answering machine in that it permits a caller to leave a voice message in a voice mailbox. Messages are digitized so the caller's message can be stored on a disk.
4. Videoconferencing involves the use of computers, television cameras, and communications software and equipment. This equipment makes it possible to conduct electronic meetings while the participants are at different locations.
5. The Internet is a continuously evolving global network of computer networks that facilitates access to information on thousands of topics. The Internet is utilized by millions of people daily.

Actually, telecommunications is not a new concept. It began in the mid-1800s with the telegraph, whereby sounds were translated manually into words; then the telephone, developed in 1876, transmitted voices; and then the teletypewriter, developed in the early 1900s, was able to transmit the written word.

Since the 1960s, telecommunications development has been rapid and wide reaching. The development of dial modem technology accelerated the rate during the 1980s. Facsimile transmission also enjoyed rapid growth during this time. The 1990s have seen the greatest advancement in telecommunications. It is predicted that computing performance will double every eighteen months. In addition, it has been estimated that the power of the computer has doubled thirty-two times since World War II (With row, 1997). The rate of advancement in computer technology shows no signs of slowing. To illustrate the computer's rapid growth, Ronald Brown, former U.S. secretary of commerce, reported that only fifty thousand computers existed in the world in 1975, whereas, by 1995, it was estimated that more than fifty thousand computers were sold every ten hours (U.S. Department of Commerce, 1995).

Deregulation and new technology have created increased competition and widened the range of network services available throughout the world. This increase in telecommunication capabilities allows businesses to benefit from the information revolution in numerous ways, such as streamlining their inventories, increasing productivity, and identifying new markets. In the following sections, the technology of modern telecommunications will be discussed.

COMMUNICATIONS NETWORKS

When computers were first invented, they were designed as stand-alone systems. As computers became more widespread, practical, useful, and indispensable, network systems were developed that allowed communication between computers. The term "network" describes computers that are connected for the purpose of sharing data, software, and hardware. The two types of networks include local area networks (LANs) and wide area networks (WANs). As the name suggests, LANs cover a limited geographic area, usually a square mile or less. This limited area can be confined to a room, a building, or a group of buildings. Although a LAN can include one central computer connected to terminals, more commonly it connects a group of personal computers. A WAN covers a much larger geographic area by means of telephone cables and/or other communications channels. WANs are often used to connect a company's branch offices in different cities. Some familiar public wide area networks include AT&T, Sprint, and MCI.

INTERNET, INTRANET, AND EXTRANET

"Internet work" is the term used to describe two or more networks that are joined together. The term "Internet" describes the collection of connected networks. The Internet has been made accessible by use of the World Wide Web. The Web allows users to navigate the millions of sites found on the Internet using software applications called Web browsers. People make use of the Internet in numerous ways for both personal and business applications. For instance, an investor is able to access a company directly and set up an investment account; a student is able to research an assigned topic for a class report; a shopper can obtain information on new and used cars.

The Internet concept of global access to information transferred to a private corporate network creates an intranet. In conjunction with corporate Internet access, many companies are finding that it is highly practical to have an internal intranet. Because of the increased need for fast and accurate information, an efficient and seamless communications line enabling all members to access a wealth of relevant information instantaneously is vital.

A company intranet in conjunction with the Internet can provide various types of information for internal and/or external use. Uses such as instantaneous transfer of information, reduced printing and reprinting, and elimination of outof-date information can provide great benefits to geographically dispersed groups. Some examples of information that an intranet might include are company and procedures manuals, a company phonebook and e-mail listings, insurance and benefits information, in-house publications, job postings, expense reports, bulletin boards for employee memoranda, training information, inventory lists, price lists, and inventory control information. Putting such applications on an intranet can serve a large group of users at a substantially reduced cost.

Some companies might want to make some company information accessible to preauthorized people outside the company or even to the general public. This can be done by using an extranet. An extranet is a collaborative network that uses Internet technology to link businesses with their suppliers, customers, or other businesses. An extranet can be viewed as part of a company's intranet. Access by customers would allow entering orders into a company's system. For example, a person may order airline tickets, check the plane schedule, and customize the trip to his or her preferences. In addition to time and labor savings, this type of order entry could also decrease errors made by employees when entering manually prepared orders.

Security and privacy can be an issue in using an extranet. One way to provide this security and privacy would be by using the Internet with access via password authorization. Computer dial in and Internet access to many financial institutions is now available. This is an example of limited access to information. While bank employees have access to many facets of institutional information, the bank customers are able to access only information that has to do with their own accounts. In addition to their banking account number, they would have to use their password to gain access to the information.

TRANSMISSION MEDIA

The physical devices making up the communications channel are known as the transmission media. These devices include cabling media (such as twisted-pair cable, coaxial cable, and fiber-optic cable) and wireless media (such as microwaves and other radio waves as well as infrared light). Wireless transmission has the advantage of not having to install physical connections at every point. Microwave stations use radio waves to send both voice and digital signals. The principal drawback to this system is that microwave transmission is limited to line-of-sight applications. Relay antennas are usually placed twenty-five to seventy-five miles apart and can have no interfering buildings or mountains between them. Earth-based microwave transmissions, called terrestrial microwaves, send data from one microwave station to another, similar to the method by which cellular telephone signals are transmitted.

Earth stations receive microwave transmissions and transmit them to orbiting communication satellites, which then relay them over great distances to receiving earth stations. Usually, geosynchronous satellites are placed roughly twenty-two thousand miles above the earth. Being geosynchronous allows the satellites to remain in fixed positions above the earth and to be constantly available to a given group of earth stations.

Many businesses either lease or rent satellite and/or microwave communication services through the telephone company or other satellite communication companies. If a business has only a small amount of information to be transmitted each day, it may prefer to use a small satellite dish antenna instead.

TYPES OF SIGNALS AND THEIR CONVERSION BY MODEM

Most telecommunications involving personal computers make use of standard telephone lines at some point in their data transmission. But since computers have been developed to work with digital signals, their transmission presents a noncompatible signal problem. Digital signals are on/off electrical pulses grouped in a manner to represent data. Originally, telephone equipment was designed to carry only voice transmission and operated with a continuous electrical wave called an analog signal. In order for telephone lines to carry digital signals, a special piece of equipment called a modem (MOdulator/DE Modulator) is used to convert between digital and analog signals. Modems can be either external to the computer, and thus to be moved from one computer to another, or they can be internally mounted inside the computer. Modems are always used in pairs.

Both the receiving and transmitting modems must operate at the same speed. Multiple transmission speeds allow faster modems to reduce their speed to match that of a slower modem. The transmission rate and direction are determining factors that influence the speed, accuracy, and efficiency of telecommunications systems.

CONCLUSION

Telecommunications is one of the fastest-growing areas of technology in the world. Because of its rapid growth, businesses and individuals can access information at electronic speed from almost anywhere in the world. By including telecommunications in their operations, businesses can provide better services and products to their customers. For individuals, telecommunications provides access to worldwide information and services.