Managing Industry Competitiveness: A Case Study of Iliad: Free Mobile to Challenge the French Mobile Incumbents

MANAGING INDUSTRY COMPETITIVENESS: A CASE STUDY OF ILIAD: FREE MOBILE TO CHALLENGE THE FRENCH MOBILE INCUMBENTS.

BY

FUNMILOLA ELUDINI

PROFESSOR S.YUTHAS

SOUTHERN NEW HAMPSHIRE UNIVERSITY

1. Identify the key economic characteristics of the French Wireless/ telecom segment (U.S.SIC code 4813, UK SIC6110) of the communications services industry.

French wireless or telecom segment is a telecommunication sector in the European member countries and possess the major economic characteristics. French wireless segment provides telecommunication network and services. It is the largest market for mobile phones in the EU member countries and worth $29.2 billion in the year 2010. It reports of about 63% in the whole telecom market in France. French telecom market possess “low market penetration rate” despite the high rate of penetration growth rates in France. French telecom market penetration rate stood at 98% in year 2010 compared to other well known EU countries such as Germany, Spain, Italy and the UK which is as a result of several “opportunities for mobile operators within the French market to gain more customers” that is more than half of the EU member countries have licenses which make the competition for customers keen.

French Mobile operators’ posses lower usage of prepaid services with its low mobile penetration rate. It is also a network operators that renders “maximum range of data and telephony services and has an expanding number of virtual network operators (MVNO) which offers services straight to their own customers in the low cost sector but do not posses key network assets”. French telecom segment has the biggest share of 72.4% of the total turnover of the voice services and generates 21.4% for the data services.

1. Conduct a five forces analysis for this industry for France.

The telecommunication sector for France is the largest market for mobile phones which offer different types of services such as telephony and data services. The telecommunication sector in France would be categorized as by five forces model. These five forces of model provide a framework to study the telecommunication industry sector in terms of the competitive forces that affects the telecom industry in France. Five forces of model was introduced by Michael E. Porter and he argued that “ competition in any industry is not only between explicit industries players which we refer to as rivals, market players, industry competitors or competing business but thus goes beyond that”. He reported the model that provides a view of all competitive forces that creates price pressure, cost, investment rate in addition to rivalry which are customers, suppliers, potential entrants and substitute products.(Porter, 2008).