Telecommunication Industry in Malaysia: Industry Analysis with Michael Porter's 5 Forces

Essay by chneohUniversity, Bachelor'sA, June 2009

download word file, 4 pages 5.0

The market for mobile services in Malaysia is highly competitive. Prior to the liberalisation of the telecommunications industry in Malaysia, Telekom Malaysia had a virtual monopoly on telecommunications services in Malaysia. In recent years, the Government has taken steps to introduce managed competition in the industry by awarding various telecommunications licences. To date, the Government has awarded eight mobile licences to operators in Malaysia. Maxis' competitors in this segment are Celcom, Telekom Malaysia (through its TMTOUCH, Mobifon 018 and ATUR011 brands), DiGi and TIME. Maxis believes that the main competitive factors in the mobile services market are network coverage, service quality, pricing and brand. The two largest participants in Malaysia's mobile market, Maxis and Celcom, are considered by many customers to their more extensive network coverage and higher service quality. In addition, the introduction of equal access and the licensing of by-pass operators have further increased competition in the Malaysian telecommunications industry.

Michael Porter five forces are used to analyze the attractiveness of the telecommunication industry.

Michael Porter Five ForcesEntry Barriera) Base stationGiven the rapid deployment of base station sites required to support network growth, Maxis has a significant number of base stations which have been installed. Meanwhile they are also some pending submission to wait approval from the local authorities. This is the common practice among mobile operators in Malaysia given the long lead time generally required for the approvals. The lack of approvals and the long waiting time had resulted a high entry barrier for new company.

b) TechnologyThe types of technologies employed by Maxis include the GSM standard for its mobile network, operating in the 900MHz frequency band. Maxis' mobile and fixed networks use a mix of Synchronous Digital Hierarchy and Plesiochronous Digital Hierarchy microwave links for most of its transmission systems. For its core data...