Analysis of Industry
Competitive Rivalry The Competitive Rivalry in South Africa is high and will continue to increase as new Providers enter the industry. * The Competition is based on price and quality. The entry of every new Customer brings with a new set of price cuts and hence intensifies competition between cell phone provo=. Major threats currently: * Cell C, because they are a low cost service provider of many services, and this has helped Cell C to penetrate the market. MTN and Vodacom offer basically the same technologies, phones, rates etc. but Vodacom leads in the area of coverage and customer service, but MTN is not far behind. Other rivals include Virgin mobile, and 8ta. Supplier Power The supplies in Mobile sectors primarily comprise of Switch Suppliers, Tower Service providers and the Handset providers. * Network Equipments: There are limited Network Equipment providers like ZTE, Nokia Siemens, Ericsson, and Huawei.
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Due to the increase in the demand and limited suppliers the power of these suppliers are high and may impact the growth plan of the operators if supplies are not consistent. * Tower providers: through the sharing technology has helped in utilizing the towers but still the coverage remains a problem due to few tower providers the bargaining power of tower providers if high. * Handset suppliers: Nokia, Samsung, LG, Sony, iPhone, and numerous other players. The bargaining power of handset suppliers is less as they are also competing amongst themselves.
Vodacom holds the only rights for distributing Iphone products, in this case IPhone. Overall we can make out that the key supplier power is high for the mobile market/Industry. Buyer Power * Switching cost is low. Other networks have also introduced number portability, which will further lead to switching between operators if the prices and services are not met. * The voice and message based services are moving toward a commodity as the competition now depends mostly on the rices as the services are similar across the operators. * The customers are demanding more value for their money which has lead to the introduction of “Pay per Second” plans. * Buyers want more and more value added services at cheaper prices. Companies have to now focus on Customer happiness and not customer satisfaction as much anymore. Threat of Substitutes * The VOIP is getting very popular, for e. g. Skype. * Video conferencing is also getting popular.
