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Based on this research of the UK telecom sector is experiencing a decline in revenues as a result of the recent economic downturn. This assessment is made due to the fact that whist overall revenues retreated, call volumes increased in 2010 and are projected to do the same for 2011 once the figures are in…
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This essay discusses that the shifts in the segment have been heavily influence and impacted by the development and popularity of smart phones that have changed the dynamics of the mobile phone segment from a portable communications alternative from landlines, to one that includes a social (text messaging, social networking), bill pay and organisational devices with exceptional on the go email connectivity, multifunctional medium whereby smart phones resemble miniature computers in terms of capabilities. The nuisances of the industry that are noteworthy is that in 2010 mobile phone connections, meaning calls made, increased with smart phones, SMS messaging and tablet SIM cards contributing 80 percent to that growth. The near saturation of the market in terms of mobile phone placements means that price and package bundling competition has heated up as the means to retain, and gain new subscribers. In equating the industry sector a PEST Analysis provides insight regarding the environment mobile telecom companies in the UK operate under. It aids in understanding the relevant trends by looking at the Political, Economic, Social and Technological factors. Under a PEST Analysis, a scan of the overall general industry environment from a long-term perspective aids in understanding broad based trends. In ascertaining the overall Political climate with regard to regulations in the United Kingdom as represented by the mobile telecom sector, the arena has been stabile. ... mobile messaging as a result of smart phones and the trending toward a younger subscriber profile represented key factors in the revenue changes and changing face of the UK mobile telecom sector. Figure 4 – Mobile Messaging Volumes (Ofcom, 2011, p. 282) As indicated, the growth in popularity of smart phones was responsible for the above: Figure 5 – UK Smart Phone Sales (Ofcom, 2008, p. 210) The shift from landlines to mobile services took off in 1998 as shown by the following: Figure 6 – UK Telecom Industry Retail Revenue (Ofcom, 2008, p. 198) As a result of heightened competition, mobile telecom service cost to subscribers has converged to the point where the cost is comparable to fixed line costs: Figure 7 – Comparison of Average Fixed and Mobile Voice Call Services (Ofcom, 2011, p. 302) The preceding figures reinforce the point that the industry has become price sensitive, thus explaining the rationale behind the merger that created Everything Everywhere. Market Structure In equating the industry sector a PEST Analysis provides insight regarding the environment mobile telecom companies in the UK operate under. It aids in understanding the relevant trends by looking at the Political, Economic, Social and Technological factors (marketingteacher.com, 2009). Under a PEST Analysis, a scan of the overall general industry environment from a long-term perspective aids in understanding broad based trends (netMBA, 2009). In ascertaining the overall Political climate with regard to regulations in the United Kingdom as represented by the mobile telecom sector, the arena has been stabile. The actions of consumer groups have raised issues represented by the method of calculating call termination procedures they state are overcharging consumers
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