Australian Telecommunications Company has continued to expand to address the demands of the market. It has remained a key player in the country’s economic growth, having generated close to $37 billion in 2008 and $98 billion revenue in 2009. The industry has over five hundred thousand employees across the country, working in various capacities (IBISWorld, 2011).
It has arguably been considered as a stimulant for employment in almost every sector of Australian economy. It has local and international companies which contribute to this tremendous global recognition. Among these are Optus and Vodafone which are considered as key players in the market.
This paper gives a critique of the performance of these companies based on their weaknesses and threats with reference to the entire telecommunications industry in Australia.
Vodafone is a UK-owned company and the leading telecommunications company around the world operating in more than twenty five countries including Australia. Vodafone Australia is the third largest Telecommunications Company in Australia, behind the giants Telstra and Optus.
The company runs a GSM mobile network which is approximated to cover 92% of Australian market (Vodafone, 2011). It also boasts of a Globalster satellite which enables it to cover the entire population. Even as the company continues to thrive in an ever-expanding economy and market, it has had its fair share of weaknesses and threats triggered by intertwined factors in the telecommunications market.
Vodafone Australia has experienced one of the worst network problems in the Australian market. Towards the end of 2010, the company registered pitiable quality in its calls, data speed, SMS reliability and voicemail services. It was faced with a class action suit for demonstrating incompetence in serving Australian people.
To maintain its business reputation, the company responded by blaming customers for using faulty software on their handsets and use of Smartphones (Vodafone, 2011). Although Vodafone CEO offered an apology, the interruption saw several customers terminate their contracts with the company to seek better services.
Additionally, expansion of the company has been achieved by direct regulation of its operations. Through mergers and acquisitions, the company has not realized organic growth. As a result, the company has a stable customer base at the expense of proper management of its subsidiaries (Vodafone, 2011).
With its operational structure centered in UK, Vodafone Australia has failed to address needs of the market allowing effective competition from smaller companies.
Moreover, Vodafone Australia continues to experience several threats as permitted by market trends and its ability to effectively serve Australians. Competition from major players and upcoming companies is seen as a major threat for the company.
Telstra which is the leading player in the market, previously possessed by the government runs most of the copper network, offering landline, broadband and mobile services (Vodafone, 2011). Immense global penetration of internet companies further threatens Vodafone’s ability to penetrate the market in future.
It is important to note that though saturated, the market still offers opportunities in terms of the aging population and changing needs for customers. Through strategic plans like simple phones and friendly pricing plans, the company stands a chance of favorably competing in market (IBISWorld, 2011).
On the other hand, Optus is ranked second in Australian telecommunications market and is owned by Singapore Telecommunications Company. Headquartered in Sydney, Optus has retained SingTel services and products like Boost Mobile, Virgin Mobile Australia, Uecomm and Alphawest (Optus, 2011).
In serving its customers, the company runs its own network infrastructure together with the use of other companies’ services like Telstra Wholesale. It has two channels of service delivery where it directly serves customers in the market and as a wholesale agent for smaller companies.
The company also provides internet services through dial-up and broadband services. It mainly serves the government, business owners and residents of Australia.
Like other players in the Australian telecommunications market, the company has weaknesses and continues to experience threats from a wide range of areas. Being owned by Singapore Telecommunications Company which has concentrated its operation in Australia, Optus is exposed to high competition from local players and other bigger players in the market.
In addition, Optus is faced with management issues manifested through labor strikes experienced before (Optus, 2011). This affects its reputation in maintaining a competitive advantage and customer base. Lastly, service delivery has not been up to date with customers complaining of low network connection speed and Cable TV services.
Even though the company is ranked second in Australian telecommunications industry, it faces stiff competition from Telstra and Vodafone among other key players and upcoming companies. It therefore suffices to mention competition as the company’s major threat.
Nevertheless, Optus prides on a number of opportunities in the telecommunications industry. With ever-changing technology, the company has a chance to expand its service and product delivery in order to address the needs of its young customers.
It also plans to increase its customer base through TV mobile services by the end of 2012 by use of FetchTV (Optus, 2011). Additionally, the company seeks to access government license to offer provisional satellite services that will cover Australian Broadband Network. This will win new customers across the country including remote regions which are not well covered by its competitors.
In general, a survey of Australian telecommunications market indicates various viewpoints with regard to the performance of companies like Vodafone and Optus. It is evident that the two companies have weaknesses which have continued to affect their performances. Nevertheless, there are countless opportunities to be utilized in maintaining competitive advantage.
References
IBISWorld. (2011). Mobile Telecommunications Carriers in Australia: Market Research Report. IBISWorld. Web.
Optus. (2011). Media Center. Optus. Web.
Vodafone. (2011). Vodafone Company. Vodafone. Web.