How to Establish a Telecommunication Company

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When you hear the word "telecommunications," you might think of cellphones. But the telecommunications industry began in 1876 with the invention of the telephone, i.e. those old fashioned landlines that hung on your kitchen wall circa 1985.

Telecommunication means the transmission of signals over long distances for the purpose of communicating, and the term encompasses more than just telephones.

First, there was the telephone, then radio broadcasts came under the telecommunication umbrella a bit later in the 19th century. Next, television arrived. Today, the term includes the internet, cellular phone networks and all of the assorted goods and services required by these types of companies, such as security and software.

Decide What Type of Telecommunications Company You Want to Start

Are you interested in opening up a cellular phone company? Or maybe your goal is a tech security firm? You could launch a radio station, start an internet provider, supply phone systems to businesses or develop and sell the software used in phone systems.

Some of these goals are more realistic than others, but they all fall under the umbrella of telecommunications.

First, you must decide what type of telecommunications services you want to provide, then you can take steps to start your business.

Write a Business Plan

A sound business plan is essential to get started and succeed. There are many sites and manuals out there that can guide you through writing a business plan, or you can hire professionals to work with you on creating one. The essential elements of the plan should be:

  1. Executive summary: This is a synopsis of your entire plan in a succinct paragraph or two. Imagine this as your elevator pitch to investors. Whoever reads this should understand what your business is going to be and how it will work.
  2. Business Description: What exactly will your business do and how will it operate?
  3. Marketing Strategies: Where will your business fit into the current market and how will it capture that portion of the market?
  4. Competitive Analysis: Who are your competitors in this space, and what is your advantage?
  5. Development Plan: Describe where the company will go and how it will get there.
  6. Operations and Management Plan: How will the company be run, who will run it and what are their qualifications?
  7. Financial Projections: What are you projecting in terms of profits for the first five years?

Name and Register Your Business

Once you've figured out your niche and developed your business plan, it's time to get down to business, so to speak. There are some regulatory and legal steps you'll need to take care of as soon as you can.

  1. Figure out the structure of your business. Will you operate as an LLC, a corporation, or something else entirely?
  2. Name your business .
  3. Buy the internet domain for your business as soon as you can. Certain entities watch new business registrations and attempt to buy up all of the domain names, then charge you a bunch of money for them.
  4. Register the name after you secure the domain

Obtain the Necessary Licenses and Permits

This part can be tricky. If you can hire a lawyer and accountant to help ensure you get started on the right foot, it's a good idea.

The telecommunications industry is regulated by the Federal Communications Commission (FCC), an independent U.S. government agency overseen by Congress. It is the primary authority for communications law, regulation and technological innovation. This means that you need to make sure you're doing everything the FCC says you must do if you're running a telecommunications company.

Because the telecommunications industry is regulated by a federal agency, you'll need a federal license or permit in order to legally operate your company. The FCC provides guidance on its site about the type of license you will require, depending on the type of telecommunications business you are running; however, it is complicated and it wouldn't hurt to have legal guidance.

Pay the FCC

Several fees are required by the Federal Communications Commission. Here is a list of fees you may be required to pay, depending on the nature and needs of your business.

  • Application processing fees for licenses, equipment approvals and more
  • Annual regulatory fees 
  • Freedom of Information Act (FOIA) fees if you need to process a request under this act
  • Forfeitures, i.e. penalties you would need to pay to the FCC for violations of law or noncompliance with authorizations.  

Find Funding

There are several avenues for funding a business. The way you decide to fund yours will depend largely on your means and how much money you need to get started. Since you already have a business plan, you should have a number in mind.

A few options:

  • Get a small business loan from the SBA. 
  • Find angel investors. These are wealthy individuals who invest in new companies.
  • Find venture capital funding. If you need a lot of money to get started, this may be the best route. Venture investors usually have more money to invest than angel investors because they are backed by firms.
  • Use crowd sourcing. This method of fundraising is gaining popularity. Start a site and ask for individuals to invest. In return, they will get a share in the company or special perks once you're up and running.

Get Started

Starting a company is challenging. But if you have a good idea and you've secured funding and all of the necessary permits and regulations, it's time to get started on opening your business.

References

Resources

About the Author

Heather Skyler is a business journalist and editor who has written for wide variety of publications, including Newsweek.com, The New York Times and Delta's SKY magazine. She has a bachelor's degree in English from Miami University and a master's degree in writing from the University of Washington in Seattle. Before writing for a variety of publications, she taught business writing in Seattle.