Meteor Case Study
Assess the attractiveness of the telecommunications industry in 1998
The attractiveness of the telecommunications industry in Ireland in 1998 is difficult to establish for various reasons outlined in this essay. The industry was a duopolistic market dominated by Eircell and Esat Digifone. Therefore, the prospect of additional competition seemed pragmatic. During this period market penetration was at 11% leaving many potential customers. In addition “unemployment was reaching new lows in a traditionally poor country, and workers are earning the kind of wages that allowed them the luxury of a mobile phone” (Gohring, 2005). In addition, Gohring states that the average value of a customer in Ireland is 48 euros, above the EU average of 31 euros, which contributes to the attractiveness of the industry.
How government policies contribute to the attractiveness of the industry …show more content…
In 1998, Eircell’s profits increased significantly from £1.6 million to over £6 million, a 278% rise (Irish Independent, 1998) .In 1998 Eircell had a 76% market share while Esat Digifone had a mere 24% market share (Comreg, 1999). Established in 1984 as a subsidiary of Telecom Eireann, Eircell is the longest established mobile network in the industry. The Comreg report states that Eircell has significant market power along with access to finance through Telecom Eireann. In addition, Eircell has 78% of the industry’s total revenue while Esat Digifone has a mere 22%. Comreg’s report comments on Eircell’s significant market power over its competition and how it “has control of the means of access to the majority of end users”. The report concludes that Eircell’s dominant position in the market may act as a deterrent to new entrants in the
Assess the attractiveness of the telecommunications industry in 1998
The attractiveness of the telecommunications industry in Ireland in 1998 is difficult to establish for various reasons outlined in this essay. The industry was a duopolistic market dominated by Eircell and Esat Digifone. Therefore, the prospect of additional competition seemed pragmatic. During this period market penetration was at 11% leaving many potential customers. In addition “unemployment was reaching new lows in a traditionally poor country, and workers are earning the kind of wages that allowed them the luxury of a mobile phone” (Gohring, 2005). In addition, Gohring states that the average value of a customer in Ireland is 48 euros, above the EU average of 31 euros, which contributes to the attractiveness of the industry.
How government policies contribute to the attractiveness of the industry …show more content…
In 1998, Eircell’s profits increased significantly from £1.6 million to over £6 million, a 278% rise (Irish Independent, 1998) .In 1998 Eircell had a 76% market share while Esat Digifone had a mere 24% market share (Comreg, 1999). Established in 1984 as a subsidiary of Telecom Eireann, Eircell is the longest established mobile network in the industry. The Comreg report states that Eircell has significant market power along with access to finance through Telecom Eireann. In addition, Eircell has 78% of the industry’s total revenue while Esat Digifone has a mere 22%. Comreg’s report comments on Eircell’s significant market power over its competition and how it “has control of the means of access to the majority of end users”. The report concludes that Eircell’s dominant position in the market may act as a deterrent to new entrants in the