Telecommunication

4/8/2019

Preliminary Report

Submitted To MAM NOSHEEN Submitted By SAAD BASHIR ROLL NO 13 MBA 1.5 (MORNING) 1ST

Telecommunication Industry: The telecommunications sector is made up of companies that make communication possible on a global scale, whether it is through the phone or the Internet, through airwaves or cables, through wires or wirelessly. These companies created the infrastructure that allows data in words, voice, audio or video to be sent anywhere in the world. The largest companies in the sector are wireless operators, satellite companies, cable companies, and internet service providers.

History: The history of telecommunication began with the use of smoke signals and drums in Africa, the Americas and parts of Asia. In the 1790s, the first fixed semaphore systems emerged in Europe; however, it was not until the 1830s that electrical telecommunication systems started to appear. The first U.S. satellite to relay communications was Project SCORE in 1958, which used a tape recorder to store and forward voice messages. It was used to send a Christmas greeting to the world from U.S. President Dwight D. Eisenhower. In 1960 NASA launched an Echo satellite; the 100foot (30 m) aluminized PET film balloon served as a passive reflector for radio communications. Courier 1B, built by Philco, also launched in 1960, was the world's first active repeater satellite. Satellites these days are used for many applications such as GPS, television, internet and telephone. The telecommunications sector evolved from the telegraph, the first mechanical device. It shortened communication from days to hours – much as modern mobile technology shortened the time span of sending large amounts of data from hours to seconds. These shifts are due to technology, and they changed how people live and do business. At one time, telecommunications required physical wires connecting homes and businesses. In contemporary society, technology has gone mobile; digital, wireless technology is becoming the primary form of communication. The sector's structure has also changed from a few large players to a more decentralized system with decreased regulation and barriers to entry. Major public corporations act as the service providers, while smaller companies sell and service the equipment, such as routers, switches, and infrastructure, which enable this communication. For growth investors, these companies provide

the best opportunities for share price appreciation. In contrast, larger companies tend to be havens for conservative, income-focused investors.

Telecommunication Industry of Pakistan: The first dial up e-mail service was introduced by Digicom Pakistan (Pvt) Limited in 1992-93. The also first dialup internet service started in Pakistan in 1994, by Digicom Pakistan, sharing a 128K link established at Old Queen Road, Karachi. Engineer Nasser Khan Ghazi, was the first engineer who installed and commissioned the first ever internet link at Old Queen Road Karachi in 1994 and became the first person in Pakistan to experience online internet browsing. The state-owned Pakistan Telecommunication Company Ltd (PTCL) started offering access via the nationwide local call dialup network in 1995. The country has been pursuing an aggressive IT policy, aimed at boosting Pakistan’s drive for economic modernization and creating an exportable software industry. In 2001 Micronet Broadband launched the first DSL service. Pakistan had almost 128 ISPs in 2007, with customers concentrated in the areas of Islamabad, Karachi, and Lahore. PTCL offers free dial-up Internet service to all its landline subscribers. In 2006 NayaTel began to offer Fiber to the User (FTTU) triple-services in the capital city of Islamabad. Broadband access is available in major cities, wireless broadband Internet has been introduced by the Wireless local loop (WLL) networks in many major cities, and Worldwide Interoperability for Microwave Access (WiMAX) networks are being deployed. Most Pakistani companies, educational institutes, and government departments maintain web sites, which has further increased the demand for Internet access. The Internet in Pakistan has been available since the early 1990s. Information and communications technology (ICT) is one of the fastest growing industries in the country. In 2001 just 1.3% of the population used the Internet. By 2006 this figure had grown to 6.5% and in 2012 to 10.0%. As of October 2018; the percentage of broadband internet users in Pakistan is 29.92%, which translates into 62 million citizens having access to the high-speed internet.

Environmental analysis: Environmental analysis is a strategic tool. It is a process to identify all the external and internal elements, which can affect the organization’s performance. The analysis entails assessing the level of threat or opportunity the factors might present. These evaluations are later translated into the decision-making process. The analysis helps align strategies with the firm’s environment. There are two parts or levels - Environmental analysis of the ‘far’ or; macro’ environment affecting all firms, and the industry analysis of the ‘near’ or ‘micros’ environment which is much more specific. Benefits of external analysis include 

Increasing managerial awareness of environmental changes.



Increasing understanding of the context in which industries and markets function.



Increasing understanding of multinational settings.



Improving resource allocation decisions.



Facilitating risk management.



Focusing attention on the primary influences on strategic change.



Acting as an early warning system

Tools for environmental analysis: 1. PESTEL 2. Porter Five Forces 3. Value Chain 4. SWOT

PESTEL There are many strategic analysis tools that a firm can use, but some are more common. The most used detailed analysis of the environment is the PESTLE analysis. This is a bird’s eye view of the business conduct. Managers and strategy builders use this analysis to find where their market currently. It also helps foresee where the organization will be in the future. Political The political factors take the country’s current political situation. It also reads the global political condition’s effect on the country and business. When conducting this step, ask questions like “What kind of government leadership is impacting decisions of the firm?” Government active areas include; 

Policies on healthcare, unemployment, exchange rates, inflation, economic growth



Fiscal policies on taxation



Laws of various kinds

Economical Economic factors involve all the determinants of the economy and its state. These are factors that can conclude the direction in which the economy might move. So, businesses analyze this factor based on the environment. It helps to set up strategies in line with changes. Economic factors refer to all the key economic variables often related to Political action such as 

GDP



inflation



Currency exchange rates



Fiscal policy tax on corporations and individuals



Regional issues like land process and labor rates

Social 

values and beliefs taste of held by people including ethnic minorities.



Culture: Attitude to work, savings and investment, ethics, etc.



Demography: Size and structure of the workforce, population shifts, aging



Social structure: class and segmentation of the market

Technological These can be internal and external. Organizations use technology – not hardware but software too such as Quality Control – and produce products and services of varying complexity. They include 

Goods and services.



Information and communications.



Transport and distribution.



information technology, computing and associated implications for production



biotechnology and new industries.

Legal: Legislative changes take place from time to time. Many of these changes affect the business environment. If a regulatory body sets up a regulation for industries, for example, that law would impact industries and business in that economy. So, businesses should also analyze the legal developments in respective environments.

Porter Five Forces: This is the ‘Industry or competitive environment analysis’ of Porter (1980). His Five Forces’ model of the competitive environment is as follows: Barriers to entry: include such factors as capital requirements, economies of scale, product differentiation, switching costs, brand identity, access to distribution channels, and threat of retaliation. The higher the barriers to entry, the higher the potential profitability of the firms in the industry.

Competitive rivalry: the intensity of competition depends on a number of factors whether or not a strong industry leader exists, the number of competitors (degree of concentration), the presence of exit barriers, the importance of fixed costs in determining capacity, degree of product differentiation and the growth rate of the industry. Supplier power is determined by such factors as importance of product to buyer, switching costs, degree of supplier concentration to an industry and the supplier’s ability to enter an industry. Buyer power. The bargaining power of buyers depends on several factors, including buyer knowledge, purchase size, product function, degree of buyer concentration in an industry, degree of product differentiation and the buyers’ ability to enter the industry. Threat of substitutes is important because they can de-stabilize the current industry structure by offering customers better-valued or more useful products. It is important to note that each industry will have its own unique interrelationship of the five forces and that the relative bargaining power of each of the five forces together determines the overall attractiveness or profitability in an industry.

The Value Chain Analysis: Internal organization can affect the cost and even the feasibility of some strategies. There must be a 'fit' between a strategy and the elements of an organization. If the strategy does not fit well, it might be expensive, or even impossible, to make it work. Each of the activities can be considered as adding value to an organization’s products. For example, the activity of operations in a car assembly plant. While the separate components do have a value in that they can be sold and bought as individual items, as engines, wheels, etc., but when they are assembled into a complete vehicle then they have added value to customers far in excess of the individual parts.

Two layers of activities are involved in Value Chain 1. Primary Activities 2. Supportive Activities The primary activities: 

inbound logistics:

these deal with the delivery. movement and handling of raw materials from suppliers; 

operations:

transformational activities which create end products from raw materials, inputs and 

outbound logistics:

refers to the processes which transfer products to distribution channels; 

marketing/sales:

includes such activities as advertising, promotion, product mix, pricing, working with buyers and wholesalers, and sales force issues; 

service:

customer service issues include warranty, repair, installation, customer support, product adjustment and modification. The support activities: 

procurement:

the firm’s purchasing of material and supplies for its activities; 

technology development:

focuses on improving the processes in primary value-adding activity; 

human resource management:

hiring, training, compensating, developing and relations with the firm’s people;



infrastructure:

a broad term for such activities as finance, accounting, legal, government relations

SWOT Analysis: SWOT analysis is one of the most popular strategic analysis models. It involves looking at the strengths and weaknesses of your business' capabilities, and any opportunities and threats to your business. Once you identify these, you can assess how to:  capitalize on your strengths  minimize the effects of your weaknesses  make the most of any opportunities  reduce the impact of any threats A SWOT analysis gives you a better insight into your internal and external business environment. However, it does not always priorities the results, which can lead to an improper strategic action.