ranscript of Porters Five Forces Analysis for Sri Lanka

Telecom Mobitel
A fundamental analytical tool which is widely used to identify and understand
the industry in better context
This will direct to determine where the power of the company lies in the
business and thereby find and develop an edge over the rivals in the
industry. Porters Five Forces Analysis To experience high profit edges:
Bargaining Power of Suppliers (Supplier Power) Bargaining Power of
Customers 1.
Weak supplier and customer bargaining power:
will direct the company to experience higher level of industrial power as
customers and suppliers are not in a position to influence and make a high
impact on companys business process.
2.
Higher entry barriers and few opportunities for substitute products:
will direct the company to experience lower level of rivalry and this will cause
to stabilise in the market with higher density of customer base. Bargaining
Power of Customers: Their revenue for the first 9 months of time period in
2012 grew by 14% from 15.9 billion LKR to 18.2 billion LKR in comparison
with same duration in year 2011 due to augmentation in companys
subscriber base cause of enhanced level of customer experience Mobitel has
to depend on local providers such as SLT (Sri Lanka Telecom) The supremacy
of customer is considered as a crucial factor since this cause to
drive the prices down by exerting pressure over the organisation
or uplifting the quality of the service for the same charge, and therefore
decrease the profitability of the business process. High degree of Brand
Identity Mobitel GSM is fixed to low price elasticity due to higher number of
industry rivals and the rate regulations of Telecommunication Regulatory
Commission of Sri Lanka (TRCSL), which makes the customers bargaining
power into high over the company.
Though the GSM process is fixed to low price elasticity
when it comes to broadband market Mobitels price elasticity is considerably

in a higher level as it has a fully fledge high speed broadband networking

technology in the country specially with better coverage than other service
providers in the industry, which reduces or mitigates the bargaining power of
customers up to considerable stage. Price elasticity factor Innovative Brand
of the Year 2011 Gold
Excellence in Engineering 2011
E Swabhimani Winner 2011
CNCI Achiever of Industrial Excellence 2011 Gold
National Business Excellence Awards 2011 Infrastructure and Utilities
Sector Winner
Brand of the Year 2011
Service Brand of the Year 2011 Gold
National Business Excellence Awards 2011 Best Tech Savvy Company
Winner Recent Achievements uplifted Company Image Bargaining Power of
Suppliers (Supplier Power) The ability of suppliers of the company to
influence the setting of prices to capture more industry profit, and the
company should able to control its suppliers to wield more power against the
market rivalry. since Mobitel doesnt own one which are authorized to have
the direct access to the national telecommunication backbone Local
Telecommunication Providers: Therefore, the above mentioned suppliers
have an upper hand and they are having more supplier bargaining power
over the company
Mobitel is concerned as a subsidiary of Sri Lanka Telecom (SLT) supplier
bargaining power is comparatively in a lower level than other market rivals.
The industry perspective factor: comparatively with other countries, the
amount of users who are using data/voice is in a lower level in Sri Lanka,
hence low traffic generated.
incremental factor of supplier bargaining power as the suppliers such as ISPs,
content providers for value added services and the peering partners are in a

position to influence the company business process. Threats of New

Entrants Telecommunication industry due to higher amount of industrial
profitability, the probability of attracting new business firms for the industry
is comparatively high.
That directly impacts to all the current telecommunication operators in the
market by making their business profitability in to risk as they may have to
experience profit reductions with newer firm introductions The industry
perspective factor: Strategic use of Information in Mobitel (PVT).Ltd. Threats
of New Entrants LankaJournal (2009, p1) stated that Bharti Airtel could able
to achieve one million of customer base in Sri Lanka within 171 days of the
launch of its services in Sri Lanka. Numerous level of value added services
plus low price package introductions for different age categories Airtel could
able to grab the customer base of other mobile telecommunication
operators in the industry aggressively However currently the rivalry caused
by new entrance with attractive lower service charges was controlled by
Tariff Regulation policy of Telecommunication Regulatory Commission of Sri
Lanka (TRCSL) as in its Proposed Ten Year Development Plan 2006 2016
Threats of New Substitutes A crucial factor which affects a companys
stability in the market by significantly influencing to the profit acquiring
process of the company.
This factor activates when the price fluctuations of substitute products which
may leads to degrade the customer base of the company by allowing
customers to move for substitutes.
More substitute opportunities in the telecommunication industry will diminish
the demand for the Mobitel as some services of which it provides become
inflexible for the customers due to more customer perspective flexible
opportunities in substitute service. Threats of New Substitutes Skype
technology Sri Lanka Telecom (SLT), Lankabel, and Suntel who were awarded
with CDMA technological license Figure 1: Predicted analysis of 2008 Skype
Subscriber Base (Evalueserve, 2005) The prevailing Skype technology not
only captured the roaming telecommunication segment

but it also made;

a high impact on local and business telecommunication fields too by

providing seamless technological advancement such as free video

conferencing plus capturing mobility technological advancements as well by
using upgraded solutions such as by introducing flexible Skype solutions for
mobile platforms. While concerning on fixed line operators awarded with
CDMA technologys targeted market segment is;
to serve companies and home usages without serving advance mobility.
this will not make higher level of impact on Mobitels telecommunication
process comparatively to Skype technology. Rivalry among Competing
Firms Due to higher amount of competency in Sri Lankan mobile service
industry each and every operator has to experience, maximum level of
industry rivalry to stabilize in the market. Rivalry among Competing Firms
VAS gives Mobitel the edge they need to overtake their rivals While Mobitel
compete on the VAS and the other services, most other operators tend to
compete only on the coverage and the rates in mobile service industry The
above articulated industry rival analysis arguments can be directly backup
with earlier mentioned;
industry achievements which they have made recently stated under
Bargaining Power of Customer analysis,
as it clearly accentuates Mobitel is on the track to success by being a
massive competitor to its rivals with successful strategic implementations."