Pest Analysis of Telecommunication Industry Essay

4557 Words Aug 11th, 2012 19 Pages

Telecommunication is the transmission of messages over significant distances for the purpose of communication. In the modern age of electricity, telecommunications has involved the use of electric means such as the telegraph and telephone, the use of microwave communications and the use of fiber optics.

The telecom industry plays an important role in the world economy and global revenues in 2008 were ~USD 4 trillion, expected to grow at a steep 11% p.a. CAGR over the next 2 years. Almost half (~USD 1.7 trillion) of telecom revenues accrue from service revenue, and analysts believe this is expected to grow significantly to ~USD 2.7 trillion by 2013.

Approximately 20% of the world
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So the role of suppliers is almost negligible in the industry. We are trying to analyze that minor role.

1. Mobile handset suppliers: There are many handset suppliers in the market, some of them are Nokia, Samsung,Motorola, Sony Ericsson, Reliance Classic, Tata Indicom, etc. Few of the new entrants are Spice, Micromax, Karbon, etc.

2. Some other suppliers in the industry are the suppliers of Optical fibre and Aluminium.

Other important parameter in this can be the software assistance, where suppliers can have edge over. The major software providers are TCS, Infosys, Wipro, Satyam etc. Again one thing is noticable that big giants like Reliance and Tata have their own software solution departments


The easier it is for new companies to enter the industry, the more cutthroat competition there will be. Factors that can limit the threat of new entrants are known as barriers to entry. Some examples include:

i) Existing loyalty to major brands ii) High fixed costs iii) Scarcity of resources iv) High costs of switching companies
v) Government restrictions or legislation

The Indian telecom sector offers unprecedented oppurtunities for foreign companies in

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