Telecommunications and Information

MBA STRATEGY
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(April 26, 2012)
MBA Strategy
Industry and Company Overview
Industry Overview : Telecommunications and Information
Telecommunications industry plays critical part in the Australian economy, recent years has seen an upward increment in the number of subscribers taking a 20% rise from 8,420,000 to 9,569,000 subscribers considering year 2010-11, Telecom carrier Telstra is the major player providing services to smaller companies resonating with TPG, Primus, SingTel, iinet and AAPT. This paper identifies with TPG and Telstra (TLS) which offer internet service providers (ISP) and telecommunications services.
Communications industry in Australia fastest growing; this is after complete deregulation in the year 2007 (Australian Security Exchange 2012). There are more than 30 players. Australia boosts highest levels of mobile ownership; and is the second after United States in the internet take-up. Australia is embracing new technology in development of digital mobile phones and digital televisions (Horak 2007). Australia will retain the leadership over decades.
Users/YearInternet Users
Dec-10Internet Users
Dec-11TotalsInternet Users
7,620,480
23,927,45731,547,937Penetration
Valid Percent24.16%
75.84%100.00%Totals7,620,48023,927,45731,547,937Source: (TPG 2012).
Competition has been stiff with the government introducing the NBN Company limited that operates designs and builds National Broadband Network (NBN), completion of the NBN implementation expected in 2015. Latest developments in the telecommunication industry resonates with submarine cables, internet, broadband, next generation and the National Broadband Network among other small scale developments in Australia.
Industry Composition
Telecommunication and information industry in Australia is dynamic in nature (TLS 2012). TLS target small and medium scale enterprises (SME) in fixed telephone lines, broadband, mobile services, internet and data solutions. TPG Telecom was formed as a merger between SP Tele-media and Total Peripherals Group. TPG specializes in mobile services, internet services; fixed telephony services (TPG 2012). The company also diversified to mobile virtual network. Telco sector controls the Australian telecommunications industry.
CompanyMarket CapShare PriceTotalsTeltra (TLS)$41,809
(96.73%)$3.36$41,812
TPG Telcom (TPM)$1,409
(3.26%)$1.78$1,411
Totals$43,218
$5.14$43,223Source: (Australian Security Exchange 2012).
Company Overview : Telstra Corporation Limited (TLS), TPG Telecom Limited
TLS is the largest Brand in Australia offering information and technology capitalizing on the mobile telephony, media services, telecommunications networks, internet services, marketing voice and the provision of pay television services (TLS 2012). TPG alongside IT and ISP services provides accounting softwares and Original Equipment Manufacturer (OEM) services (TPG 2012).
Porter’s Five Forces Model analysis (Porter 1980)
Rivalry among Existing Firms (Intensity of competition) : High
Threat of New Entrants : Medium/High
Threat of Substitute products: Low
Bargaining Power of Buyer: Medium
Bargaining Power of Suppliers: Medium
Overall Industry Profitability: High
Strategic Analysis
TLS has been targeting the small scale and medium sized enterprises (SME) (TLS 2012). TLS offers pay televisions and media services, as well (TLS 2012). Next IP(TM) and Next G(TM) networks targets growth (Hill 2012). Transformational strategies in Telstra Corporation resonate with cultural change and introduction of NBN partnerships fostering...