 only a small set of simpler interfaces. A new software vendor entering such Integration of new systems requires significant efforts Complex vertical Incumbent Large intertwined legacy operator (incumbent) systems vendors Operator Software vendor Streamlined or Small Commencing standardized operator (entrant) layered systems vendors Integration of new systems is straightforward Vendor1 HW k Vendori..k Horizontal software Fig. 2 Incumbent operators are served by large software vendors, whereas small vendors entering the OSS/BSS market will target commencing operators Market Polarization due to Difference in Interface Implementation Efforts polarized market may benefit from focusing on the submarket with the lighter interface implementation efforts. This phenomenon is also visible in the statistical analysis results represented in Fig. 4 of chap. 9. This is likely to increase the number of vendors in this new segment, thereby increasing competition which can be visible in the form of a wider variety of offering and price erosion. This chain of events is likely to benefit new operators and lower the threshold for new operators to enter the market, which will increase the volume of the market segment. Barriers to Horizontal Development Olli Martikainen The growth of telecommunications has recently been based on mobile services and broadband data. According to OECD statistics (OECD 2005) the number of mobile subscribers of all telecom operators in 2003 was 828 million and in 2006 the number exceeded 2 billion. So the number of mobile connections exceeds by far the number of fixed access lines, which was 503 million in 2003. Already in 2006 the number of VoIP users exceeded 100 million, which is 20% of all fixed connections. It is expected that the Internet Protocol (IP) based traffic will soon grow tenfold compared to the amount of traditional ISDN based traffic. The transition from the existing services to Internet based ones will change the service infrastructure as well as the telecom market. Traditional telecom an