Competitive forces of telecommunication in bangladesh
Competitive forces ofTelecommunication in Bangladesh
Porter’s five forces model has the ability to determine the competitiveness of a market.It can help a company understand the structure of its industry and stake out a position that is more profitable and less vulnerable to attack.
Porters Five ForceBargaining power of buyersBargaining power of suppliersThreat of substitutesThreat of new entrantsThreat of rival
Bargaining power of buyersBuyers have six mobile telecom operators in Bangladesh.Which are trying to offer cheaper rate compared to other.There is opportunity for buyers to select the best company.Bangladesh buyers get the most priority in telecommunication industries.
Bargaining power of suppliers The bargaining power of suppliers in the mobile industries varies depending on the brand name and strategic importance of the supplies as well as the size of the company. Such as Ericsson Nokia Siemens in the mobile telecom machinery industries that type of suppliers who enjoy strong power in the industry. Its major clients included Grameenphon,Banglalink airtel,citycell,Robi,Teleitalk and BTCL. Recently Huawey technology played an important role in. modernizing network infrastructure on the new 3G platform Therefore, the bargaining power of suppliers in the industry is moderate to weak.
Threat of substituteso Mobile telecommunication is a high tech industryo The substitutes that would replace the products or services of today are strongly related to the factor of innovation.o Substitutes of Bangladesh mobile companies are PSTN operators, VOIP service , skype,google talk,wimax and etc.o So the threat of substitutes is week in Bangladesh .
Threat of new entrants Bangladesh have already six giant mobile companies. They have created significant brand positioning and economies if scale in network coverage . Which also act as entry barrier. Government and rules and regulations like imposition of huge tax on Sim card, strong tariff control by the authority, can also create difficulties to entrants . But some companies are finding other ways to enter the industry. Example airtel bharati acquired 70% stake of warid telecom as airtel enter to Bangladesh market. Hence it seems that the threats of new entrants in mobile industry are moderate to week.
Threat of rivalBangladesh have also six big mobile companiesEach company is trying to increase the market share by lowering call rate, superior network coverage and better value added services.the competition has driven the industry’s average revenue per share to a very low level. Grameenphone is leading the industry and standing in an advantages position than others.The rivalry among existing competitors is very high.