THE TELECOMS INDUSTRY

Khuriyah Schmidt-Luprian
Karolina Sumeradzka
Yefei Yang
Alastair Yap
Kahina Younsi Chabane
Leah Meng Yuan Zhang

INDUSTRY OVERVIEW
Provision of telecommunications services
Broadly two categories
Fixed line telephone and internet
Mobile telephone and internet

Increasing convergence of services
Companies offering more: triple-play and quad-play
services
MAJOR PLAYERS
FOUR TYPICAL STRATEGIES OF TELECOMS
Source: Deloitte Consulting 2013
DELIVERY OF SERVICES
Fixed line phone/broadband
BT Openreach network
Cable network


Mobile Network
Limited radio spectrum frequency available
Periodic auctions
MVNOs pay to use mobile network of established
companies

The Competitive Environment

Threat of New Entrants (Low):
High capital investment
Regulatory approval & Licensing
High operational costs
Scarcity of spectrum
High exit costs


Bargaining Power of Buyers
(High):

Increased number of
telecom products- little
differentiation.
Low shifting costs.
Consumer rights and
security.
Access to information.

Bargaining Power of Suppliers
(Medium):

Fixed line services provided
by BT Openreach/Cable
Proliferation of suppliers
Strong competition between
existing suppliers and
newcomers
Threat of Substitute Products
(High):
Availability of Products and
services from non-traditional
telecom industries , enabled by
new technologies ( Internet
telephony, broadband internet
services, satellite links)
Competitive Rivalry (High):

Cut throat competition
between existing players.

Competition encouraged
by government.

Source: Ofcom (www.ofcom.org.uk)
S W
T
Strengths

Global demand for IT services
Targeting all different client bases.
Global communication abilities
Good infrastructure and
communication networks
Opportunities

Possibility of an expension in the
global market, speading coverage
Development and investment in
innovative hight technology product
and services
Convergence of services


Threats

New competitors
Disruption of Services Due to
uncontrollable Events
Regulatory Environment
VoIP/Instant Messaging

O
Weaknesses

Highly regulated and licensed.
Difficult market to enter due to
requirement of high financial
resources
Competitive market


INTERNAL AND EXTERNAL ENVIRONMENT
PESTL ANALYSIS
Ofcom: implements the legislation of the government
Includes pricing, funding & network licensing

Market and industry increasingly growing steadily in
all sectors throughout recession until now.
Disposable income as influencer in products offered
by tri-play and quad-play providers (TalkTalk, Virgin
Media) as well as more segmented providers
(Vodafone, Netflix).
Job creation by large players contributing to the
economy

POLITICAL
ECONOMIC
PESTL ANALYSIS
Consumer demand for faster broadband and higher
storage capacities due to increased usage secondary
to a proliferation of internet enabled devices (mobile,
tablet).
Demographics creating niche products for the older
population
Customers interests & incorporating into company
values

Increased demand for speed and connectivity within
both the mobile phone and broadband sector, therefore
a need for companies to expand communications
infrastructure.
New device releases may increase demand for
services
Increase of TV boxes providing on demand and bigger
library of film and shows.
Continuous innovation of devices and services.
Whilst decline in older sectors, such as fixed phone line.
SOCIAL
TECHNOLOGICAL
PESTL ANALYSIS
Enforced regulation by EU Commission to have lower
rate for roaming under the Eurotariff.
Digital economy act- prevention of copyright
infringement of movies and music. ISPs required to
block sites and the warn persistent offenders distributing
such materials.
Regulations to keep the telecom market competitive
through support of B2B sales, IE: cable network (Open
reach) and mobile networks (4G).
LEGAL
THREE LEVELS OF STRATEGY
1. Corporate




2. Business




3. Functional
Mission,
vision &
values
Business Model
Usage & Service
Access
Industry
Structure &
Regulation
Regular telephony declines and VOIP grows. Ubiquitous and seamless
access models prevail with high levels of rich digital content consumption
accessible from any device, platform or network. Communications remain
fragmented across several tools but shared capabilities enable interoperability
Voice is monetized as a feature of connectivity. Operators provide open
wholesale access and interfaces to a wide range of capabilities including
connectivity, customer information and billing services, to drive traffic on
networks.
New infrastructure
competition
stemming from
government,
municipality and
local initiatives. will
new rules as Next
generation network
is deployed. Mobile
and fixed
termination rates
disappear and
boundaries blur
between fixed and
mobile services
Mobile and fixed broadband
become as pervasive as TV
in advanced market. The
battle of mobile broadband
now favors LTE/3G
penetration increasing in
emerging markets. A
bifurcated market of
devices emerges with high
penetration of ultra low cost
devices in emerging
markets. 1 in 3 devices in
advanced markets is a
high-end smartphone, MID
or laptop
Telecoms in Future