Case Study of P1

Topics: WiMAX, Internet, Internet service provider Pages: 21 (5131 words) Published: April 14, 2010
1.0 Introduction

1.1 Company Background

Packet One Networks (Malaysia) Sdn. Bhd. (P1) was launched on August 18, 2008 as a subsidiary of Green Packet Bhd, which is a leading global developer of Next Generation Mobile Broadband Networking Solutions. P1 is Malaysia’s first and leading WiMAX telecommunications company with the country widest WiMAX network and it represents the first large-scale commercial deployment of Mobile WiMAX in Southeast Asia, as well as the first large-scale deployment of an 802.16e WiMAX network outside Korea. P1 was one of four companies awarded 2.3 GHz spectrum licenses by the Malaysian Government to deploy WiMax services throughout Malaysia (, 2009).

1.2 Company’s vision

P1 objective is to become the market leader in wireless broadband industry. To achieve that, P1 are now putting their effort on broadening wireless broadband connectivity across the region in order to capture more market. (, 2009). 1.3 WiMAX

WiMAX is an abbreviation of Worldwide Interoperability for Microwave Access. It is a standard-based technology enabling delivery of last mile wireless broadband access as an alternative to cable and DSL. WiMAX enables deliverables of bandwidth between two points or between a point to multipoint to customer. The usage of WiMAX requires certain bandwidth of spectrum to be allocated to the service provider, in accordance to the channeling plan approved and published by Malaysian Communications and Multimedia Commission(MCMC) (, 2008). 2.0 Michael Porter 5 Forces

2.1 Threat of new entry

Telecom industry is one of the industries which have the biggest barrier to enter. Firstly, to enter this industry requires a lot of cash to cover high fixed equipment and innovation cost (Gupta.A, 2008). Secondly, the ownership a telecom license can be one of the biggest barriers to entry, because government may refuse to give license to operator to operate their business (, 2009). Thirdly, advertisements to create awareness to public are very costly; it is very hard to draw public attention if there is no enough advertisement since there are so many players in Malaysia. Moreover, skilled human capitals are required to operate the business (Gupta.A, 2008). Lastly, high exit barriers scared off investors in get into this business, concluding that the threat of new entry is very low. 2.2 Competitive rivalry

As Internet plays a very important role in human’s daily life, most of the people have to in touch with internet every day. So, to attract more subscribers, competitors have to lower down their price and provide more benefits in order to survive since they have invest an enormous capital in this business that with high exit barrier due to its specialize equipment.

There are more than 10 internet service providers (ISP) in Malaysia. Normally, new carriers are used to take low price strategy to attract customers, which lead to a price war (, 2010). Besides that, these ISP do their promotion and advertising frequently as everyone in major city can see it every day and everywhere. The fierceness of frequent advertisement had leaded to an advertising war between P1 and Streamyx in 2009 (Risen.J, 2009). Moreover, High customer churn rate shows that any unsatisfaction in term of speed, stability and price will cause customer to switch to other service provider (Gupta.A, 2008). It may conclude that the competitive rivalry in internet industry is highly intensive.

2.3 Bargaining power of buyer

With the increased choices of broadband service in Malaysia, the bargaining power of buyer is rising; this leads into customers seeking low prices but have better services. On the other hand, the switching cost from one to another Internet service provider is relatively low, customers can switch to other service provider easily, and this enhanced the bargaining power of buyer.

2.4 Bargaining power of supplier

P1 need to have...
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