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CPA 117 2013 Sem 1 - Telstra Analysis

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CPA 117 2013 Sem 1 - Telstra Analysis

Page 1 of 32
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....
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)