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The Attractiveness of Telecommunication Industry in 1998

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The telecommunication industry has seen significant regulatory reform from the 1990s onwards to the present date. There are major sectors in the industry such as fixed line telephony, television delivery, mobile telephony, fixed wireless access, satellite service, radio and postal sector. I am going to predominantly focus on mobile telephony sector of the industry. Particularly on what were the attractive features of the industry analyzing it by using porter’s five forces which determines the attractiveness of the industry. I will discuss what attracted Meteor into the industry; analyze Meteor strategies entering the market and what factors caused them to alter their strategies and finally how I envisage the telecommunication industry in …show more content…

Eircell saw a gap in the market and launched their service. This turned mobile telecommunication into a mass market product. This helped Eircell to increase their pre-tax profits from £1.6m to £6m in the year to April 1998 and they claimed to have 77% share of the Irish mobile phone market (Independent.ie, 1998). Threat of substitute; substitute of products or services can limit the potential of an industry. The industry will suffer in terms of earnings with numerous substitutes. Products price elasticity’s is affected by substitute products, a close substitute product constrains the ability of firms to increases prices. Considering this, the Irish mobile telecommunication industry in 1998 was an attractive industry to be a part of as it was a duopolistic market, with Eircell and Esat Digifone being the only companies in the industry. Although Meteor was given the third mobile network license but its operation were put to a halt as Orange pursued legal action against Meteor, these proceedings continued until June 2000 (Independent.ie, 1998). In 1998 in mobile telecom industry Eircell substitute was Esat Digifone, initially Eircell introduced pre paid service as mentioned earlier which allowed them to capture majority of the market however Esat fought back by offering similar service but at a lower rate (Independent.ie, 1998).

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