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WELCOME

1. 2. 3. WELCOME. DYNAMICS SHAPING THE MOBILE TELECOM INDUSTRY. (A comparative case study on Bangladesh and the Netherlands). by Amit Biswas (Bangladesh) Maastricht School of Management MBA28. PRESENTATION OUTLINE. WHY ?. Motivation Problem Definition Literature Review

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WELCOME

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  1. 1 2 3 WELCOME

  2. DYNAMICS SHAPING THE MOBILE TELECOM INDUSTRY (A comparative case study on Bangladesh and the Netherlands) by Amit Biswas (Bangladesh) Maastricht School of Management MBA28

  3. PRESENTATION OUTLINE WHY ? Motivation Problem Definition Literature Review Research Questions Significance HOW ? Conceptual Framework Research Methodology Methods of Data Collection & Analysis Reliability of Data WHAT ? Findings & Discussion 1

  4. PRESENTATION OUTLINE WHY ? HOW ? CONCLUSION, RECOMMENDATIONS AND FUTURE RESEARCH WHAT ? 2

  5. WHY THIS RESEARCH ?

  6. Motivation Work experience Trends & Challenges Understand market dynamics Slowed revenue growth New International expansion 3

  7. Literature Review – Mobile Telecom Sector BANGLADESH Six mobile operators with 93.788 mn active subscribers On average 8% growth in new customers every month Slowed revenue growth in mobile telecom industry High SIM tax & Ambiguity in regulative authority Shift towards value-added-service (e.g. 3G, data services) Source: AT Capital Research, 2010; BTRC, 2012; Cellular-news, 2012 4

  8. Literature Review – Mobile Telecom Sector NETHERLANDS Three mobile operators with 20.1 mn active subscribers Slowed new customer acquisition in mobile telecom industry Slowed revenue growth in mobile telecom industry Liberal rules and regulations in mobile telecom sector Strategic partnership with VOIP service providers Source: OECD, 1999; Totel Pty Ltd, 2012; Wireless Intelligence, 2012, Morris, 2012 5

  9. Literature Review - Proposed strategies For Bangladesh For Netherlands Innovative product & service Smart piping Consolidation Efficient piping Partnering with VOIP New revenue generating opportunities Innovative marketing and product & service offering Removal of SIM Tax Consolidation Adaption of new techniques Focus on M-Commerce & Data related services Fair, Transparent renewal policies Source: AT Capital Research, 2010; The Economist Intelligence Unit, 2010; The Economist Newspaper, 2006 6

  10. Literature Review – Similar Study HIGH Competition PORTER FIVE FORCES MODEL FOR MOBILE VIRTUAL NETOWRK OPERATORS IN INDONESIA by Sirat et al. Telecommunication Regulation Research Center, Indonesia LOW Profit 7

  11. Problem Definition “ Forces behind slowed revenue growth in the mobile telecom Industry in the respective countries ” Source: Wireless Intelligence, 2012 8

  12. Major Research Questions Explain & Compare the dynamics shaping mobile telecom industry in both Bangladesh and the Netherlands. 9

  13. Minor Research Questions • What are the forces that influence this industry in the respective countries? • Why both the country’s mobile telecom sectors is experiencing slowed revenue growth? • What are the challenges faced by the mobile operators in the respective countries? • Are the existing regulations favourable towards growth? • What are the changing trends in the mobile telecom sector in respective countries? • What are the complementary industries in the mobile telecom sector in respective countries? • How the prevailing challenges faced by mobile operators in the respective countries can be resolved? 10

  14. Significance of the Research Understand forces influencing respective countries Tackle prevailing challenges Formulate future strategies Formulate reciprocal strategies for expansion in international territories Stepping stone for future studies 11

  15. HOW WAS THE RESEARCH CONDUCTED ?

  16. Conceptual framework Threat of New Entrants Bargaining power of Supplier Bargaining power of Buyers Threat of Substitutes Complementors Adapted model of Porter: Porter’s Six Forces Model 12

  17. Why Porter’s Six Forces Model ? Shows most common sources of local environmental threats Defines and characterizes the degree of threat and determines the competitive environment COMPLEMENTORS Sales Sales Forecasts the average level of performance of the firms DVD DVD PLAYER For evaluating industries which relies on technology Source: Prof. Adam Brandenburger and Barry Nalebuff Source: Hesterly, 2012 13

  18. Research Methods Qualitative Quantitative Mixed approach Articles Recent publications by telecom research agencies Reports by mobile operators Reports by government regulatory authorities E-interview Data from Wireless Intelligence Annual and Quarterly reports of mobile operators Both Deductive & Inductive Research methods 14

  19. Reliability & Validity of the data Qualitative Quantitative Mixed approach Data will be collected from credible sources governing mobile telecom industry Structured e-interview of experts from mobile telecom industry will be collected. Wireless Intelligence is the definitive source of mobile operator data, analysis and forecasts, delivering the most accurate and complete set of industry metrics available. 15 I Pages

  20. WHAT WERE THE FINDINGS ?

  21. Demographic Comparison 80 80 60 55 53 44 38 40 20 14 Source:www.geert-hofstede.com Source: www.cia.gov 16

  22. Threat of New Entrants Bangladesh The Netherlands THREAT OF NEW ENTRANTS High High LEVEL: LEVEL: Low Low High SIM Tax High Licence renewal fees Limited spectrum availability Rules and regulations are favourable towards new entrants Spectrum auction 17

  23. Bargaining power of the buyers Bangladesh The Netherlands BARGAINING POWER OF BUYERS High High LEVEL: LEVEL: Low Low Similar products and services Lower switching cost Multiple SIM syndrome Similar products and services Affordable switching cost 18

  24. Rivalry among the competitors Between Bangladesh and the Netherlands RIVALRY AMONG EXISTING COMPETITORS Source: Wireless Intelligence, 2012 High LEVEL Low Source: Wireless Intelligence, 2012 Source: BTRC, 2012 Source: Wireless Intelligence, 2012 19

  25. Threat of substitutes Non-Conventional Substitutes Free Calls and Messaging High LEVEL Low 20

  26. Bargaining power of suppliers Between Bangladesh and the Netherlands “…… I really don’t think they are adversely affecting the operators’ performance….. doesn’t have any significant impact on the market.” • Raihan Islam, Former Head of Customer Acquisition, • Airtel Bangladesh Limited “ The Ericsson, Nokia-Siemens, Alcatel-Lucent gave a profit warning. So, they are also under severe pressure not only from their own industry, they also see the Chinese are coming in. ..” - Mr. Anil Kutty, Innovation Management Consultant BARGAINING POWER OF SUPPLIERS High LEVEL Low 21

  27. Influence of complementors Bangladesh The Netherlands Influence of complementors Positive Positive LEVEL: LEVEL: Negative Negative Content Provider & Smartphones Call Centers Mobile Banking RFID Industry (SIM NFC) IT Industry (Cloud Computing) Content Provider(Spotify, Dizzler) 22

  28. CONCLUSION

  29. Forces Influencing mobile telecom industry (RQ-1) Bangladesh The Netherlands Government Policies Government Policies Power of the customers Power of the customers High competition High competition Positive influence of complementors Positive influence of complementors Affordable substitute Non-conventional substitutes Less challenge from new entrants High threat from new entrants 23

  30. Reasons behind slowed growth rate (RQ-2) Bangladesh The Netherlands High SIM Tax Biased regulation Lack of policies protecting existing mobile operators Multiple SIM Syndrome Lack of set procedure for license renewal and fees Undifferentiated P&S High level of threat from VOIP applications Undifferentiated P&S Detrimental competition Intense competition 24

  31. Challenges faced by mobile operators (RQ-3) In Bangladesh In Netherlands 1. Biased regulation towards new entrants 1. Rigid govt. regulations 2. High level of threat from VOIP based applications 2. Lowest effective call rate 3. Growing Churn rate 3. Declining effective call rate 4. Declining ARPU 4. Growing Churn rate 5. Intractability of the customer 5. Declining ARPU 25

  32. Existing regulations and influence on growth (RQ-4) In Bangladesh mobile telecom industry In The Netherlands mobile telecom industry “..Many a times it becomes an impediment to the growth of the Industry…” • Raihan Islam, • Former Head of Acquisition, Airtel Bangladesh Limited “..the current regulations are mostly unfavorable to mobile operators” • Omar RasmanNizam, • Manager – Segments & Regional Planning, Robi “In general, European Commission and OPTA have been quite strong…..on that perspective the regulation has been unfavorable” • - Anil Kutty, Innovation Management Consultant “The regulation is really a disadvantage for the existing mobile operators because they favor the new entrants” • - Karan Oberoi, Product Innovation Manager, T-Mobile 26

  33. Emerging Trends (RQ-5) Smart Phones VOIP applications Smart phones Increase Data usages Advanced mobile banking Outsourcing Chinese suppliers Tie-up with advanced content Providers Mobile banking In-house app development Network sharing 27

  34. Complementors (RQ-6) Bangladesh The Netherlands Mobile manufacturing industry RFID Industry Digital Content Industry IT Industry Call Center Industry Music streaming service industry M-Commerce Industry 28

  35. Comparison of dynamics shaping mobile telecom industry (Major RQ) Porter’s Six Forces The Netherlands Bangladesh THREAT OF NEW ENTRANTS LOW HIGH BARGAINING POWER OF BUYERS HIGH HIGH LOW LOW BARGAINING POWER OF SUPPLIERS THREAT OF SUBSTITUTES HIGH HIGH RIVALRY AMONG EXISTING COMPETITORS HIGH HIGH POSITIVE POSITIVE INFLUENCE OF COMPLEMENTORS EXPECTED OF COMPETITIVENESS MIXED MIXED EXPECTED LEVEL OF PROFIT AVERAGE AVERAGE 29

  36. RECOMMENDATIONS

  37. Recommendations (RQ-7) In Bangladesh mobile telecom industry 31

  38. Recommendations (RQ-7) In The Netherlands mobile telecom industry 30

  39. Theoretical recommendations Industry specific model development Include “Complementors” in Porter’s original model Incorporate PESTEL model Incorporate model for internal analysis (e.g. VRIO ) Redesign for analyzing dynamic market 32

  40. Future Research Further refinement by incorporating other models Porter’s national diamond model for international expansion. Research on complementary industries. On benefits of partnering with non-conventional competitors On formulation of most suitable regulations for Respective countries. 33

  41. Summing up…. 34

  42. 35

  43. THANK YOU !!

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