Stc Five Forces Model and Competitive Advantage

Topics: Mobile phone, Internet, Saudi Arabia Pages: 4 (1088 words) Published: August 6, 2010
Rivalry Among Competitors
In 2005 Saudi Arabia became a member of WTO and opened up the Saudi Telecommunications market to foreign competitors. The Saudi Arabian Telecommunication market has become increasingly competitive. In addition to competing on prices all the major competitors are striving to offer differentiated products and services aimed at increasing their market shares. The competition is apparent in the decline in STC’s income despite higher revenues. Table 1 – Level of Competition (2008)|

| | | | | | | | | | | |
|  | Local services| Domestic fixed long dist| Inter-national fixed long dist| Wireless local loop| Data| DSL| Cable modem| VSAT| Leased lines| Fixed Wireless Broadband| |  | C| C| C| C| C| C| ...| C| C| C|

| | | | | | | | | | |
|  | Mobile| Paging| Cable TV| Fixed sat| Mobile sat| GMPCS| IMT 2000| Internet services| Inter-national gateways| |  | C|  | ...| C| C| C| C| C| C|

It is also noteworthy that Saudi Arabia is one of the three countries in the region which has reached a status of full competition according to ITU across all telecommunication fields, the other two being Jordan and Bahrain. As such it is clear that the Rivalry among competitors is high and thus keeps the prices down and requires for all rival in the market to come up with innovative and differentiated ways to attract customers. Threat of New Entrants

The growth in Telecommunications globally has many factors one of which makes the threat of new entrants high. Which the shift is from wired to wireless services has made it possible for many entrants to come in. However the market currently seems saturated. The number of fixed telephone lines has been particularly stable and risen only 0.2 % CAGR over the last five year from 16.02 per 100 inhabitants to 16.22. Mobile phone subscriptions in Saudi Arabia are overwhelming at 174.43 per 100 inhabitants (Note that mobile...
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