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Consequences of increased competition on basic existing telecom services
Competition in the mobile phone market
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Telecommunication Industry Strategic Group Map Introduction The telecommunication industry is one of the largest industries in the world with a wide range of players. The competitive nature of this telecommunication industry makes it perfect for analysis. This investigation explores the performance of the top ten industrial players within the industry. A strategic group map is developed to compare these firms’ profitability against the market value of each firm for fiscal year 2015. Strategic Group Map Fig. 1: Strategic Group Map for the Telecommunication Industry (Source: China Daily, 2015) Evidence from the strategic group map in figure 1 above indicates that the competition is stiff. A number of small companies in terms of market value are outperforming those with larger market values. For instance, Vodafone has a market value of $ 88 billion and an annual profit of $ 7.74 billion (China Daily, 2015). In contrast, AT&T has twice the value of Vodafone at a market value of $ 173 billion and an annual profit of $ 6.2 billion (China Daily, 2015). A similar incident is evident between Deutsche Telekom with a market value of $ 85 billion and …show more content…
China Mobile is located in China while Verizon Communications and AT&T are located in the United States, which are regions with a high population. The general income levels for residents in these countries are significantly high. Consequently, the buyers have immense buying power. China has a host of other major players like China telecom that provides a stiff challenge to China Mobile. Similarly, Verizon Communications is located in the same region as AT&T (Rajasekar & Al Raee, 2013). Subsequently, buyers have the power to determine the telecommunication service provider to adopt. Major industrial players are aware of the buyer’s bargaining power, and they do everything possible to lower their prices and improve the quality of their
Of particular importance is the deregulation of the telecommunications industry as mentioned in the act (“Implementation of the Telecommunications Act,” NTLA). This reflects a new thinking that service providers should not be limited by artificial and now antique regulatory categories but should be permitted to compete with each other in a robust marketplace that contains many diverse participants. Moreover the Act is evidence of governmental commitment to make sure that all citizens have access to advanced communication services at affordable prices through its “universal service” provisions even as competitive markets for the telecommunications industry expand. Prior to passage of this new Act, U.S. federal and state laws and a judicially established consent decree allowed some competition for certain services, most notably among long distance carriers. Universal service for basic telephony was a national objective, but one developed and shaped through federal and state regulations and case law (“Telecommunications Act of 1996,” Technology Law). The goal of universal service was referred to only in general terms in the Communications Act of 1934, the nation's basic telecommunications statute. The Telecommunications Act of 1996 among other things: (i) opens up competition by local telephone companies, long distance providers, and cable companies ...
Imagine if nobody had a cellphone in today’s world. That’s why today everybody has some form of a cellphone contract with the four major companies (AT&T, Sprint, Verizon or T-Mobile) or a less know cellphone provider. AT&T and Verizon Wireless provide more than the other two major companies.
Verizon Communications Inc. is one of the leaders in providing communication services around the world. Its primary offerings are wireless, wireline, and broadband communication resources to meet residential, business, and government needs. As a leader in its industry, how can Verizon continue to grow its business? What strengths, weaknesses, opportunities and threats impact the success of Verizon now and in the future?
In a competitive environment where market is changing instantly, organizations are in a fix to design a strategy that could market their products enticing the consumers to buy their products and services. Market is the arena for business gladiators who fight out for maximum share and profitability and this is possible only through effective marketing strategy. Competing in present economy means finding ways to break out of commodity status to meet customers’ needs better than competing firms (Ferrell and Hartline, 2010). The intensity of competition has increased after the introduction of media and internet where the companies present their product in the best way through advertisements, product reviews, blog entries, etc. With the advancement in technological innovations, companies have found various ways of providing services to the consumers in a cheaper and effective way and this has resulted in communication revolution in late 1990’s as the cellular technology was unfold in most of the regions. Singtel Optus Pty Limited (Optus) is one such company that has evolved during this period as a leader in integrated communications and this paper is assumed to make an analysis of the company’s marketing strategy and its financial position in the market industry.
In conclusion, current trends and significant events concerning T-Mobile were examined. A hard look was given to the economy, demographics, technology, political and legal issues, and social characteristics. T-Mobile is strong across the board, with surprising statistics backing up a variety of topics. The economy is strong, the demographics are not far-fetched, technology is improving, there’s no huge political or legal scandal, and T-Mobile is socially strong.
see why AT+T has a presence in nearly 100 countries around the world, and does
The industry environment has a more significant effect on the firm’s strategic actions. By five forces analysis including threat of entry, the power of suppliers, the power of buyers, product substitutes and the intensity of rivalry among competitors, AT&T is to find its position in the industry. Mentioned before the company acts as the first mover in lots of segments of the industry environment it is competing in. Having an intensive rivalry because of the speedly developing high tech requirements of the environment and the R&D forces of the leader companies, new entrants are discouraged. Late movers have commonly less chance to be able to compete and gain advantage over to companies such as AT&T and its competitors.
In fact, some of the biggest threats to the company’s growth are the government’s regulation that increases the risk to the underlying business. In addition, the risk of losing the exclusive contract for the iPhone would be a major loss for AT&T. Most of the consumers choose AT&T because of their exclusive contract for the iPhone. Hence, this loss of business will significantly influence the AT&T's profitability and revenue. Moreover, the antitrust authorities play an important role on approved the merger of AT&T.
There are a large number of service providers available for consumers to choose from depending on their wants and needs regarding network coverage and data plans. The cost of switching carriers is now lower than ever before, and many of Verizon’s competitors will cover these costs in return for new business. Additionally, many consumers are becoming more price-sensitive and may decide to switch carriers if they believe the opportunity cost of a lower price outweighs a minute decrease in network
This case study analysis is on Samsung Electronics Company (SEC) and how it has climbed up the ranks in the past decade via calculated marketing strategies, extensive market research and analysis, and a risky bet on how the market will evolve. Samsung’s principle outlook took time and education from within and thereafter the general market.
Telecommunications gained mainstream attention in the early 90’s; however the initial key market was business men and women, who used their phones whilst being on the move and so allowing them to communicate with their companies with ease. Though in the modern era, telecommunication went through segmentation in the market trends, and now in this day and age it would be difficult to find someone who does not own some form of mobile technology. Many phone providers battle to provide the best service for their customers (Figure 1).
The Telecommunication industry operates in a dynamic market where the key to success is adaptability with agility. In the traditional scenario, Telecom Service providers delivered end-to-end services to their customers. They used to control almost the entire value chain. However in the present liberalized marketplace, they now have to face challenges like stiffer competition, higher customer expectations, falling market share and growing price pressures. To respond to these challenges, Service providers have to go beyond self contained boundaries. They have to broaden their business relationship with suppliers, partners and customers and work out outsourcing arrangements. Even though the Service providers worldwide encounter different regulatory environments and have different strategies to stay relevant in the industry, they have similar needs, challenges, risks and struggles to remain profitable in the face of unprecedented churns in the market.
By the end of 2003, Nokia was the clear market leader in the mobile phone industry in terms of sales and profitability. It was ahead of giant companies like Motorola, Ericsson, Siemens, Samsung, and other worthy competitors. Since the early 1990s, Nokia's Strategic Intent was to build distinctive competency in product innovation, rapid response, and global brand management. Its strategic intent required rapid growth in the core businesses of mobile phones and telecommunications networks. This goal was achieved by Nokia's development of new products and expansion into new markets. In order to become the global leader as it is today, the company had overcome numerous challenges and obstacles over the last decade.
Under the circumstance that the mobile phone industry entered the 3rd generation, Nokia faced competition from both macro level and industry level. For the macro level, the government encouraged competition among the operators and handset manufacturers by giving digital licenses to new entrants. As a result, the mobile phones became more sophisticated, for example, the cameras and the games in the mobile phone. For the industry level, which can be analyzed by the Porter’s Five Forces, (lecture )Nokia was facing threat of new entrants, competitive rivalry and the bargaining power of buyers is increasing as well. As the government encourage completion between the handset manufacturers, there are several new entrants from different countries enter this industry, such as Apple from USA, Samsung from Korea. These new entrants compete with Nokia in both smartphone segment and basic phone segment. Some of them even constructed “ecosystems”, which they could integrate the services and applications quickly, in order to produce the phone in just two days. For the bargaining power of buyers’ aspect, they do not need to rely on the only operating system Symbian. They can choose Windows mobile launched by Microsoft, Android launched by Google and Ios launched by Apple, in addition, basically all of them are better than Symbian (Amiya, 2010). The buyers could choose any
Being one of the most valuable brands in the world, it has captured a major market share in the European telecom industry (Vodafone Annual Report 2013). Again, we will make a comparison among these countries to see which has the highest probability to succeed in the market and what could be the best strategy, not only to enter into the market but also to survive in severe competition with other international companies already operating there. The reason why I have chosen Bangladesh is that it is a huge market with a population estimated approximately 166.28 million as of 2014 and ranked 8th in the list of countries by population (CIA Factbook, 2014). Like other developing nations, the growth of telecom market in Bangladesh has exceeded all expectations and has made a significant impact on the country’s overall economy in terms of aggregate investment, FDI and production level (Islam, 2010). More than 124.705 million people of the total population of 166.28 million have mobile phone subscription. (BTRC 2014 & CIA Factbook