Analysis Of Porter's Five Forces Attractiveness Of Telecommunications Industry

In 1998, the Industry was in a state of Duopoly, with the only players being Eircell, with 330,000 customers, and Esat Digifone, with 80,000. Market penetration was a mere 11%, having grown by 4% since the previous year (ComReg, 1999). On December 1, the industry was deregulated and a competition for the awarding of a third telecom licence was held. With the view, expressed by Etain Doyle, Director of Telecommunications Regulation, to “increase competition and choice” which would bring about “lower tariffs and the availability of high quality services” (ComReg, 1999), the licence was awarded to Meteor.
The attractiveness of the Irish Mobile Telecommunications Industry in 1998 can be assessed through the use of various frameworks, matrices and models.

Porter’s Five Forces
The attractiveness of the Industry in 1998 can be gauged by the use of Porter’s Five Forces Framework for Industrial Analysis. The Five Force Framework, which was unveiled by Michael E. Porter, of Harvard University, in his book, Competitive Strategy (1980) is used in understanding the attractiveness of an industry environment for the “average” competitor within it (Ghemawat, 2002). The Five Forces recognised by Porter include:

1. Suppliers
Suppliers in the telecommunications industry had reasonable power over the market. Mobile phone producers had control over the
With a largely young population, the Irish were adapting to the new technologies introduced, such as the mobile phone, and demand was slowly growing, with the market penetration rate for mobile phones at 11%, growing by 4% on the year previous (ComReg, 1999). As a large percentage of the population fitted in to the target demographic of 15-44 year olds, the mobile telecommunications industry was very attractive in 1998, before and after