Strengths

• BT (a BT Group plc subsidiary) is the UK’s lead broadband Internet provider and fixed line telecommunications operator that:
• Provides global telecommunication services in more than 180 countries worldwide;
• Headquartered in London UK has around 106000 employees as of 2020
• Participates in London and New York Stock Exchange and is listed in the FTSE 100 Index;
• Provides most British fixed-line telephones with local loop and trunk network connections, and telephone exchanges;
• Operates more than 28 million UK telephone lines;
• Owns largest nationwide telecom coverage and penetration;
• On the basis of Universal Service Obligation, provides public call boxes fixed telephone lines nationwide;
• Extends communication operations on global markets through acquisition and re-branding of the domestic and overseas businesses, specifically: BT Infonet, 2005; BT Radianz, 2006; Dabs.com, 2006; PlusNet plc, 2007;
• International Network Services Inc, 2007; Comsat International, 2007; Wire One Communications, 2008; and Ribbit, 2008.
• Invests in new Internet Protocol century network 21CN.

Weaknesses

• BT main weaknesses are associated with the following factors:
• Underdevelopment of mobile business and lack of fixed-mobile convergence;
• Lack of business strategy towards the promotion of ‘cheap voice calls’;
• Occasional payphone problem due to BT operations;
• General complaints about customer services provided by BT.

Opportunities

• Transition to the new century network (21CN) in 2010 including the transfer of half of its customers by 2008;
• Expansion to more profitable products and services that are less regulated;
• Emphasis on telecommunications and IT solutions and broadband internet services;
• Extension of ‘BT Tradespace’ online service platform to serve small businesses;
• Advancement of ‘BT Vision’ to provide high-quality broadband television services;
• Expansion of Internet smart-phone services.
• Expansion of services on highly-dynamic UK telecom market and internationally;
• Contracting more overseas partners to further its global expansion;

Threats

• Fierce competition from BT’s main rivals: Carphone Warehouse; Google; O2; Orange and Vodafone);
• Global financial crisis;
• Workforce and management shortages in BT core business divisions, including retail, wholesale, Openreach, and BT Global Services);
• Overall increase of redemptions;
• Potential risk for BT bond markets;
• Fund management crisis with 6.6 b. slumps;
• Operating markets liquidity;
• Recent behavioural targeting scandal;
• Inability to foresee the successfulness of long-term projects considering current economic fluctuations.

BT Group, formerly British Telecom, is a public limited company operating in the Telecommunication industry offering the products and services of fiber optic network, home security, broadband, mobile, and fixed-line telephones. Dealing in the telecommunication sector, the firm was originated in 1846 and founded as BT group plc in 1984, having its headquarters in London, United Kingdom. As of 2020, the company has shown a strong revenue figure of 22.905 billion pounds and has occupied an employment figure of almost 105,000 (BT, 2020). From the global telecommunication industry perspective, the assessment of Porter’s five forces would be a suitable method for developing prospect strategies to better understand the company standing position.

Competitive Rivalry in the Market

The competitive rivalry in the telecommunication industry is considered to be high because of the presence of several firms providing Telecom and media services to meet the demand of communities across the globe. As a consequence of this increase, numerous companies and institutions have dominated the sector to provide telecommunication services, and BT group is becoming one of the world’s leading service providers catering to customers in over 180 countries. BT has the largest broadband service market share, accounting for 35 percent of all fixed broadband customers across the country in 2018. The major competitors of BT group globally are AT&T, Verizon, Deutsche Telecom, Vodafone and Orange with the revenue of 161.5, 117.5, 80.5, 43.7 and 42.2 respectively, according to (Statista, 2021). Thus, the existence of such giant firms in the market leads to tough competition in the industry.

Threat of Substitutes

The threat of having substitute services is distinctly moderate to high in the telecommunication industry, primarily due to the industry’s reliance on research and advancement in technology. VOIP has emerged as the most severe threat among the various replacements that have evolved. Skype and other similar applications have become increasingly common among the millennial population and are quickly becoming the predominant mode of communication. As a result of technical breakthroughs, many alternatives to landline telephones have arisen (Wong, 2021). Many of these are more accessible and provide much greater value to the customer, making landline phones less important. Therefore, the accessibility of substitutes in the telecom industry is considered moderate.

The Threat of New Entrants

The threat of new entrants in the telecommunication business is relatively low because of the operating firms in the market already providing services and captured the market set the barriers high enough to restrain new firms. One of the most significant deterrents to joining the telecom industry is the initial and ongoing high financial expectations. Many firms who wants to step in need technical strength and resources to sustain, otherwise the risk of exit barriers in terms of loss might be huge. Because of the high fixed costs, only prospective entrants with a wide range of resources attempt to enter this sector. Furthermore, gaining the license to operate and meeting the requirements is difficult (Grishunin and Suloeva, 2016). The big firms enjoy Sunk cost advantage as they have recovered the setup expenses by capturing the primary market. Thus, making the entry options for the newcomers are low.

Bargaining Power of Buyers

The Bargaining power of consumers in the context of the telecom industry is moderate because of the similarities in the product and services provided by the telecom firms in the market. However, since consumers and firms that use services rely on more specialized goods that are tailored to their needs and requirements and are usually signed into long-term contracts, also the market category is vulnerable to considerable switching cost (Shafei and Tabaa, 2016). Keeping in view, such patterns of customers make the bargaining power of consumers moderate in the telecom industry.

Bargaining Power of Suppliers

The Bargaining power of suppliers in the telecom industry is low to moderate because of the presence of several local and international manufacturers and suppliers in the market. Leading suppliers in the sector include wireless telecommunications equipment, switchboards, optic cable manufacturers, and billing machines. Organizations’ bargaining effect is limited when it comes to dealing with agreements because there are so many suppliers with multiple options. (Tanskanen, 2015). Moreover, the switching costs of the firms with other suppliers in terms of product and services needed are considered to be low, which also puts a limitation on the supplier bargaining power. Therefore, in context to the telecom industry, the bargaining power of suppliers is moderate.

References

BT, 2020. Annual Report. [online] Bt.com. Available at: https://www.bt.com/bt-plc/assets/documents/investors/financial-reporting-and-news/annual-reports/2020/2020-bt-annual-report.pdf.
Grishunin, S. and Suloeva, S., 2016. Development of project risk rating for telecommunication company. In Internet of Things, Smart Spaces, and Next Generation Networks and Systems (pp. 752-765). Springer, Cham.
Shafei, I. and Tabaa, H., 2016. Factors affecting customer loyalty for mobile telecommunication industry. EuroMed Journal of Business, 11(3), pp.347-361.
Statista, 2021. World’s largest telecom companies by revenue 2017 | Statista. [online] Statista. Available at: https://www.statista.com/statistics/221382/revenue-of-top-30-global-telecommunication-operators/.
Tanskanen, K., 2015. Who wins in a complex buyer-supplier relationship? A social exchange theory based dyadic study. International Journal of Operations & Production Management.
Wong, R.T., 2021. Telecommunications network design: Technology impacts and future directions. Networks, 77(2), pp.205-224.