CPA 117 2013 Sem 1 - Telstra Analysis

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Case 2 Telstra
Module 2 External Analysis
1. Define the industry of the company (2.6)
Australian mobile telecommunications carrier industry
2. What are the characteristics of the industry that the company is in and how is the industry changing over time? Characteristics:
Technology innovation is a key driver for changes and success in this industry. The industry is under scrutiny of government. Government policies play an important role in market competition and pricing. *ongoing price competition in japan and government support in Korea Changes over time:

Changes in market
Voice segment used to be the most profitable segment, however, it has been experiencing significant drop in revenue recently. Improvement in mobile phone and improved network capacity and functionality has enabled data consumption to be the prospective most profitable segment in the industry. Changes in governmental regulations

Deregulations in the industry has led to more fierce competitions to stabilize and grow player’s market shares.

3. Industry value chain (2.9)

4. Industry segmentation (based on products or services) (2.14) 5. The life cycle stage of the industry and reason (2.17)
Industry segmentation by products and services
Segments (definition)

Historical perfomance
Expected performance
Reasons for growth or decline
Equipment
(sale of handsets and mobile devices)
Steady growth in revenue
Expected to growth in revenue steadily
1. Growth in revenue
2. demand has been driven by the advancement in smartphone and tablet Voice
(call charges and access fees)
decline in revenue

Expected to decline further
1.Significant decrease in revenue over years
2. Customers like to communicate in a different way (eg messaging) 3. new competitors eat up some market shares (VoIP)
Messaging
(text/short message service; multimedia message service)
Growth in revenue
(second fastest growth)
Expected to grow in revenue
1. Major growth in the past five years.
2. Customer like to communicate in messaging.(Customer behavioural change) 3. Business trends to increase usage of messaging as a means of communication Non-messaging data
(mobile internet, media updates, musice streaming, mobile tv, gaming and GPS mapping) Growth in revenue

(fastest growth of all the segments)

Expected to grow the fastest
1. Driven by development of smartphones
2. High proliferation of high data usage device(smartphone)
Mobile commerce
(commercial transaction, typically payment transaction)
Growth in revenue
Expected to grow the fastest
1.Convinence by conducting transactions on phones.

6. Remote environment analysis (TEMPLES model) – Growth (2.21) Factor
Issues that have impacted and will impact on the industry
Impact on
industry growth
Technology
Development of smartphone and tablet technology has led to greater demand on data usage as smartphone can allow users access to internet, entertainment, social networking and games ect.Positive

Development of technology in improving network has allowed faster speed to explore internet on smartphone. Positive

Development in technology has allowed greater competition on traditional voice service by introduction of VoIP.Negative

Has shifted demand from voice service to data service. Potential growth lies on data service segment.

Has integrated services together across different telecommunication sector. (video transaction media) Overall impact of Technology factor very high. Potential growth in this industry except voice service segment Positive

Economy

Didn’t mention

Overall impact of economic factor

Markets

Optimistic market prospective: four billion subscribers are set to be exceeded in 2015. The amount of mobile data downloaded is expected to at least double in the four years. And the industry is expected to continue as one of the most profitable industry. (p.16)

Resulted from technological innovations in communication devices and network upgrade....
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