Analysis of the telecommunications industry

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Table of contents


  1.   Introduction

2.   Industry Structure

3.   DRETS analysis

      3.1 Demographic

       3.1.1 Aging population

      3.2 Regulatory

      3.3 Economic

      3.4  Technological

      3.5 Social

        3.5.1Trends in the use of mobile packages

4      Opportunities and threats

5.   Porter’s 5 Forces analysis

       5.1  Power of buyers

       5.1.1  Information on package costs

       5.1.2 Switching costs

       5.1.3  Loyalty

   5.2  Power of suppliers

       5.2.1 Evolving value chain

       5.2.2 The complicity of the value chain earlier and now

       5.2.3 Orange AS

       5.2.4 More Complex Value Chains

   5.3 Threat of substitutes

       5.3.1  Skype

   5.4 Threat of new entry

      5.4.1  Chance for market entry

      5.4.2 Ways of entry

   5.5   Rivalry  

6. Competative analysis

         6.1Market share

7 Commonalities and Differences

   7.1 Commonalities

   7.2 Differences

         7.2.1 Product/Service range

         7.2.2 Price

         7.2.3 Positioning

8.  Orange

        8.1 Call centres

8.2 Recommendations for improving call centres using Disconfirmation Model of service quality


Appendix – list of tables


This report will provide an analysis of the telecommunications industry. In doing so it will look at the industry structure, identify sub-sectors and major players within them and look at the services they provide. This report will focus on mobile services operators and particularly the mobile voice and data (SMS) services they provide. In the end it will look at one major player, identify service operation issues and give recommendations on how to enhance the service. This report will also look at trends in marketing environment using DRETS analysis which will help to identify opportunities and threats for the industry. Then it will look at forces that drive industry development using Porter’s 5 Forces module. Continuing with commonalities and differensis in operation of major players Commonalities and differences between the industry’s major players will also be given consideration.

1. Introduction 

The telecommunications industry is one of the most competitive, changeable and complicated in the UK. It is highly driven by technological development and by its increasing importance for the world’s economy and for society.

2. Industry Structure

“The term ‘telecommunications’ describes the communication of voice, data, and images over long distance.” The Telecommunications industry “offers a wide range of services including cellular, paging, Internet, cable, voice and data communications, and local and long-distance services.” Telecommunications industry has sub-sectors Based on the medium over which the network provider services it can be divided into sub sectors. (Sub sectors then would be television, radio, fixed and mobile services and the internet for example). The industry is becoming more complex however, as services like television and mobile telephony merge. 

  1. DRETS analysis

3.1 Demographic

3.1.1 Aging population

An aging population is the major demograhic change that will have an influence on all existing market sectors. Regarding the mobile telecommunications industry this means services will have to be adapted to the needs of elderly people.

  1. Regulatory

Althought the mobile telecommunications industry was privatised and liberalised and therefore became more competitive, there are demands to make it even more competitive. For instance Ofcom (the regulatory body for the telecommunications industry) insists on abolishing charges for contract termination. Furthermore Ofcom pressures MNOs (mobile network operators) to reduce the costs for calls from one MNO to another. And the EU regulatory commision for telecommunications insisted on cutting costs for international calls.

3.3 Economic

The current economic crisis has had an impact on the mobile telecommunications industry as well. Customers are not so confident about their financial prospects any more and are more likely to delay “upgrading to potentially more expensive contracts if they can” 

However, the fact that many telecommunications users are early adopters and are keen on always owning the latest technology and model will remain a driving force for sales.

It is expected that technological developments such as improved web browsing speed and navigation and GPS integration will increase handset functionality in 2010 and that because of this more people will want to trade up their phones. This should keep the growth of handsets stable.”

According to Mintel at the end of 2008, the number of mobile connections again exceeded the number of people living in the UK with 126 for every 100 people. The absolute number of mobile phone connections is approximately 75 millions.

It is forecasted that the growth of mobile telecommunications should reach 22% between 2008 and 2013 and in current price terms, rise to £1.8bn 

3.4 Technological

The trend in the technological environment are new mobile services like Mobile TV, IPTV and video telephony.  They developed out of the fusion of different telecommunications services, as, for instance, digital television and mobile telephony.

These new services became available with the launch of the third generation mobile services, which combine high-speed mobile access with internet protocol (IP), based services. 3G allows faster data transmission over mobile handsets.

 Although new services (Mobile TV, IPTV, video telephony) are emerging there are no direct subsidies to basic voice and data services. Table shows that mobile voice and mobile SMS services, which this report focuses on, are in their maturity stage.

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Online presence gives a chance to companies to operate, inform and provide services (purchasing) and create awareness about their services globally. Customers in their turn got a chance to be informed about new offers and get a chance to compare prices.

  1. Social

It is estimated that “the use of mobile phones for voice calls has not risen significantly in recent years, whereas there has been a sharp rise in their use for data and other non-voice calls.”

The most recent introduction is SIM-only contract packages, which allow consumers to purchase a SIM card for use ...

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