Nowadays Telecommunication industries are facing many challenges in building their business in Australia (Walden, 2012). Telstra is the chosen organization to make this topic clearer and emphasis on the challenges faced by the organization. As the time passing, population is increasing, and the technology is getting advanced day by day and Information Technology has become the integral part of every individual nowadays in this new world of technology (Adekunle Suraj & Bontis, 2012). The challenges that telecommunication industry of Australia are facing cannot be eliminated completely but it can be minimized to extent level, for which solution and recommendation has been introduced in this report.
Telstra Corporation Ltd. is one of the largest telecommunications and Media Company established in Australia. It was the first company to introduce Australia with the mobile networks in Australia. It operates and builds telecommunications networks and makes business by marketing mobile voice calls, pay television, internet access and many other services. It offers a full range of the telecommunication services and giving a big competition to the marketers in the same field (Telstra, 2017). These services cover a large area of product and services that can be provided by a telecommunication industry. Telstra is the largest and incumbent fixed-line service provider in Australia including PSTN, business and home phone and products. Telstra have also owned the majority public phones and take the responsibility to maintain it in all over the Australia (Telstra, 2017). It is the Australia’s largest operator of 3G UMTS and GSM mobile networks in the Australia.
Following are the brief categories in which challenges faced by Telstra can be categorized:
- Political factors
- Economic factors
- Social factors
- Technological factors
- Market factors
The government and telecommunication companies both have different opinions on how to telecommunication can be handled and run. Nowadays internet has become the integral part of the lives of individuals, thus government should acknowledge internet and Wi-Fi as basic right for the citizens. It is the need of the time that both government and telecommunication company treats internet and data in same manner (Castells, 2013). There is war raging between the government and the civilians of Australia about the net neutrality, net neutrality would prevent the service providers from throttling data speeds and internet speeds.
Rates of interest, taxes and inflation of Australia are affecting the telecommunication industries including Telstra, as the price per plan are affected by such expenses, which will in turn affect the customers. With the increase in the population, more telecommunication resources are needed to be implemented; it costs the population living in rural areas (Aksoy et al., 2013). Technological advancement and customers are the min sustainability reason for Telstra, thus it is creating web pages, using digital marketing campaigns and advertising the brand on the internet to reach the customers of the Australia. Wide spreading of telecommunication services and technologies leading to establish more industries, this is resulting in economic development by providing jobs to the civilians of (AustraliaShahiduzzam & Alam, 2014). Lastly, time needs the availability and accessibility of the services 24x7.
The growth of telecommunication is limited in the rural areas, as it is expensive and difficult to expand in the rural areas. Customers of the rural regions have not enough money to buy internet, telephony and television packages. With the increase in population need of the telecommunication services has been increasing rapidly which can drive prices as plus revenue for Telstra depending upon the number of customers, location and needs (Abdulai Mahmpoud & Hinson, 2012). Telstra telecommunication industry is monopoly; they are the head of mobile and internet carriers. Telecom services have become backbone for the users or individuals with mobile and other devices and needed internet for communication, surfing, social media, learning, teaching and many others. For an average person telecommunication has become the most important aspect for the daily life activities.
There is advancement in the requirements and needs for the telecommunication companies like Telstra in Australia. Telstra is using fiber wires instead of copper wires. Mobile phones are becoming more compatible which is asking telecom companies to target the wireless business primarily. People needs internet access all the time including basic needs like voicemail, messaging and caller ID, so data are being added to the mobile plans, even Wi-Fi is being implemented in the buses and cars (Smith et al., 2012). Increase in ‘needs’ led Telstra to invest more in the organization and hold strong influence over its customers and tackle its competitors in the market of smartphones, computers and laptops.
With the increase in population, there is also establishment of new telecommunication companies in Australia and across the world like Optus, Vodafone and Virgin mobiles (Mayorga & Sidhu, 2012). SWOT analysis will be a better option to describe market of Telstra in Australia.
· It is the leading telecommunication company in Australia with better reputation
· Service portfolio is expanded in wide range
· Active sponsorships
· Customer Service Base is strong (Ershov, 2012).
· More than 35,000 employees in more than 230 countries
· Limited market shares
· Tough market segments
· Limited Liquidity Position (Klettner, Clarke & Boersma, 2014)
· Increment in IT market
· Demand increasing for telecom services
· 4G broadband launch
· Strategic growth initiative (Klettner, Clarke & Boersma, 2014)
· Competition with Vodafone, Optus and Virgin Mobiles
· Rapid change in technologies
· Stringent regulations (Wilson, 2014)
Challenges Faced by Telstra for its Sustainability
The challenges that Telstra is facing now for its sustainability can be listed as:
Mobile devices penetration has increased from 30 % to 130 % from since 2008. It is being estimated that out of two Australians, one owns an internet- accessible smartphone and one out of five owns an ipad or mobile devices, which have internet access. Following is a graph showing the increased demands in cloud computing and internet uses on go (Jopson & Caliso, 2016). Cisco has estimated that the demand will increase with higher rate and reaches up to 70% or 80% per year for the next decades. This could be the chance of Telstra to cover the whole market and make great businessunfortunately;it is not in this way for Telstra. Following is graph proposed by Cisco about the growth in the traffic of Australian mobile data:
Increases in demands are being fulfilled by falling prices of the telecom services provided by Telstra. Prices of Data Plan have been fallen from 1.8 cents per Mb to 1.0 cent today from since 2011 (Gharakheli, 2017). Price cutting has been a long-term feature of the Telstra telecommunication industry, which can wipe out the benefits of the growth for Telstra.
Telstra has been responding to the increased needs and demand of its customer by providing lots of new services and trying to fulfill all the requirements that new customers are demanding. Earlier, there were landline connections for communication but by the growth of telecommunication industries in Australia, now an individual can think of mobile phones, mobile internet, Foxtel, T-boxes and internet access at anywhere, anytime.Whereas, each of the offered services operates within the discrete niche that is none of the devices are interactive. It is not the way of driving a big industry by considering the customers or the consumers. Customers want to access the internet on TV, on computer, they want to download TV on the computer and access these services in ipad. Nielson stated that younger users are more attracted towards the internet plan that a telecommunication company offers through Twitter and Facebook which results in eroded pricing power of Telstra (Freeman & Hutchins, 2016). This is the trend of new age to use the communication technology, which are based on the internet and Telstra will have to move forward by considering this trend and provide services which are trending nowadays. Earlier messaging was cost to 25 cent per message, now it is almost free with every mobile plan. This led to a problem that the devices or the services for which Telstra charges separately are converging, this is not a solution this is not justified in any ways as the customers will have to pay different prices for accessing the data that is already been paid as per the plan on different devices (Rogerson, Seixas & Holmes, 2016). The convergence exercises by Telstra results in the margin pressure on the services that it offers to the customer.
The NBN is Accelerating the Shift
The National Broadband Network (NBN) replaced the network of Telstra with the one, which is owned by the government that helps Telstra in delivering eight times increased speed than the current ADSL2+ technology (Walkins & Lillingstone-Hall, 2014).
Originality that made Telstra an attractive business has been removed by the tantalizing potential, which is done by owning the networks, which are affordable to control prices and margins and take benefits in the competitive advantage. For the short term, cash flows of Telstra will be boosted by the payments made by NBN and that of for long term the effects will become alarming (Molleryd, 2015). This implication will help Telstra in increasing the potential for nimble competitors like TPG and iiNet to compete them by providing customers with more diverse and competitive services and product.
Telstra has been growing the market share in the Australian market of mobile businesses from 41% to 43% from since 2009. This implies that the brand is attractive for the customers to pay for the services that are being offered by the Telstra and many customers may even agree to pay more for those services (Rahman & Areni, 2014). This could be a buffer chance for Telstra but margin compression and price attrition may be a weaker buffer than it appears. Rapid price deflation may make all the services very cheap but the affordability will become irrelevant same as the market of laptop and C are facing nowadays. It might provide more protection than its competitors might, but the demand for apples and other companies are providing better offers and covering the whole market and it is becoming difficult for the Telstra to meet the competitive expectations (Goggin, 2012). There is a trouble in the Telstra that it does not manufacture or design its own products including the T-boxes, ADSL modems and everything else has been either purchased from another organization or rebadged under its name. This led to the loss in the brand value of the Telstra.
Cybercrime can affect the Telstra and its customers by altering the services provided by it. Cybercrime is a topic of high concern for information and technology sector of this age as this threat is increasing day by day. There are various examples that have already hampered many telecommunication companies in Australia. Cybercrime includes unauthorized access of an individual to the private and sensitive information of an individual. In telecommunication, intruders generally bent on getting internet services and telephone services without any payment. Even sometimes, they find a way to decode the encryption and coding to create cheat get to access free internet and make business from it by selling to the users in manner to get free internet services (Saputra, 2016). This will affect the organization and will divert it from its achievement and goals, which is to provide better, efficient, and budget internet and telephony services to the customers.
Developed Solution for the Raised Challenges
Brand name is the most important objective for any organization to increase the price of its services and products. Brand level is much higher for the Telstra in the market as it is one of the biggest telecommunication industries in Australia. Loyal customers will always move toward the brand name irrespective of the price increase and any other holdback causes (Ross, 2013). Demand for the telecommunication is increasing rapidly and being estimated that it would be the biggest market in information and Technology market in future, this give a chance to evolve in all the regions of technologies for Telstra.
Negotiating with the government, policy makers, and the communication body of Australia will be helpful in this context. This paragraph will emphasize on the legislative company laws that are not favorable for the Telstra. AGTA in Australia is responsible to face the responsibility of the regulating functions of Telstra and other telecommunication companies in Australia.Australian Government Telecommunication Arrangement is the body that deals with the telecommunication affairs in the Australia (Tomasini et al., 2014). Negotiating with AGTA will help in conveying the problems that may occur in the business body of the Telstra and take to high level of the authorities where these policies and laws are being created. Telstra can also negotiate on the policies and make amendments in order to adjust the policies, which can be beneficial for the company. Government will never let it happen along one-sided but adjustment may bend both sides that will result in positive aspects for both the government and the Telstra.A recommendation can be made by Telstra by meeting his body with the government and discuss on the ways by which policies can be made little bit flexible that will help the Telstra to manage its business in market more smoothly. Paying heavy taxes to the government should be the primary concern while negotiating with the government and must be addressed before the ministries.
Optus, Vodafone and Virgin mobiles are the biggest competitor of Telstra in Australia and Telstra will always want be ahead of them in business. Proper strategies and proper mapping and implementing those strategies will lead Telstra to reach at the top in the run of telecommunication industries. One of the biggest challenges among the mentioned above challenges is the competitive market for Telstra. Telstra need to make strategy to overcome this challenge and think of new and innovative offers that will not only benefit the customers but also provide benefits to the company (Nimako, 2012). The stakeholders or the owners will have to find a better and more attractive way which has been never implemented in the market before and apply to its services in order to overcoming this challenge. In order to increase the awareness among the new or old customers Telstra need to create a committee that will be responsible for handle all the promotional activities of Telstra including the up gradation, which are necessary for those activities. Including this other options should also be included in the program as discussed by the seniors and any other third party who is more experienced in this field of advertisement.Firstly, it will be beneficial if the Telstra can embark on the intensive research in the Australia considering the concern about their previous performance and contrasting it with the present performance. This will help in pointing out the hidden objectives that can be put in the list of the plan on enhancing the performance of the organization. This research will also help in gathering information on the activities and the services that competitors and other telecom service providers are offering to the customers and find if there is any loops, which can help in, tackle the market by Telstra.
There should be well structured and a compliance framework for the security model of Telstra in order to overcome the challenge of cybercrime. Telstra’s cyber security framework should have the ability to maintain the technically proficient oversight network’s operation of the Telstra. This should also include the location of data, authority of the users, and awareness among the employees there should be system to detect if any breach or compromise happens to the database (Yan et al., 2012). There should be proper auditing on the information sharing keeping in mind that the information provided to the government have also probability of releasing and exposed to unauthorized user. Risk assessment might also help in overcoming this challenge more efficiently as it will help in avoiding the delay procurement or network designing. Data breaching notification should be implemented in the system in order to detect if any intruder tries to access the server or enters the network using malicious coding.
Based on the above report it can be concluded that Telstra is dealing with certain challenges for sustainability in the market which are listed above. But Telstra has a benefit of credit in the market as it is the first and the oldest telecommunication industry in Australia. Issues with the government regarding taxes and policies cannot be eliminated in any time regarding present or future. But this can be made easier for the industry by compromising with the government. This concern should not be the priority, it should be concerned but the priority of Telstra should be other solutions like implementing innovative services and product for the customers and find a solution to swim out this competitive market and win the race. Cyber Crime should be primary and priority issue that Telstra should be concerning on because of the threats that digital world is tolerating the most. Telstra should also start creating its product by own and launch to the market, it will not only regain the loyalty of the lost customers but also help in making good business which will completely eliminate the challenge faced by the price diminishing of the products.
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