The Attractiveness of Telecommunication Industry in 1998

The telecommunication industry has seen significant regulatory reform from the 1990s onwards to the present date. There are major sectors in the industry such as fixed line telephony, television delivery, mobile telephony, fixed wireless access, satellite service, radio and postal sector. I am going to predominantly focus on mobile telephony sector of the industry. Particularly on what were the attractive features of the industry analyzing it by using porter’s five forces which determines the attractiveness of the industry. I will discuss what attracted Meteor into the industry; analyze Meteor strategies entering the market and what factors caused them to alter their strategies and finally how I envisage the telecommunication industry in five years time.
The Irish telecommunication industry was developed by the direct involvement of the Irish government, which created a state owned monopoly industry in Ireland. A monopoly market is not efficient as a lack of competition leads to inefficiency, restricts customer choice and exploitation of the customer by charging high prices in the market can occur. A new regulation was much needed. Under the world trade organization act Ireland was given until 2000 to open up its telecom market , in spite of this the Irish government decided to advance the deadline to 1st of December 1998 (Essick, 1998).The Irish telecommunication industry was now fully liberalized . I will now access the attractiveness of the industry by using Porter’s five forces.
Threat of new entry; an ideal situation for a firm is to be in an industry where there are many barrier of entry for a new firm to enter the industry. The biggest barrier being access to finance to cover the huge fixed and off course ownership of lice...

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...ing on how educated the buyer is about the product. If the buyer is educated then they are in a strong position as they can make more informed decision when choosing their products. However if the buyer is not well informed he/she has low power. Eircell new it was important to inform their buyers, they wanted to increase their brand awareness when they launched ready to go as mentioned earlier. In november 1997 their brand awareness was in the region of 53% but through media and being involved in campaigns of their target market there brand awareness had increased to 75% by end of January in 1998 (The Gerry Ryan Show RTE, 1998).From the above analysis we can conclude the buyer of power in the telecom industry is high.

Power of the supplier; As there were only two suppliers present in the Irish mobile telephony industry , the power of the supplier was weak in 1998.