Can You Give Me PEST Analysis For Telecom Industry?

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Can You Give Me PEST Analysis For Telecom Industry?

2 Answers

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Answer 1

A PEST analysis for the telecommunications industry needs to be divided into the four categories; political, economic, social and technological. In addition, some PEST analyses also include the categories legal and environmental. Each of these subcategories of a PEST analysis help build up an idea of the framework that helps macro-environmental factors used in the environmental scanning component of strategic management.

A PEST analysis is part of the external analysis that is carried out when doing market research, and gives an idea of the macro-environmental factors that a company needs to keep in consideration.

Political

The political factors of the telecom industry are the ways that the government intervenes on the industry. Government laws put restrictions on the tariffs and phones that the telecommunications industry can produce and all new technology must adhere to a strict set of government rules. Goods and services provided by the telecom industry also need to fit the safety and privacy government regulations.

Economic

Economic growth, inflation and interest rates can all have an impact on the telecommunications industry. Rival telecom businesses need to stay competitive but most have had to raise prices during the global recession. Different companies will try to beat others by offering limited time offers on some of the latest mobile phone handsets.

Social

Some of the biggest social factors that have affected the telecom industry are those considered with career attitude and safety. The increase in on-the-go business careers has led to an increase in desire for mobile phones that will alert for messages, phone calls and emails. They also need to have the facility to carry out conference calls, instant messaging and a host of other career focused features.

Safety regarding mobile phones also needs to be taken into consideration by the industry. Phones with hands-free features for cars are a must in the current environment.

Technological

The rate of technological change is important within the telecommunication industry. New models of phones and communication devices can be produced at an alarmingly fast rate and it is essential that manufacturers compete to have the most up-to-date handset available.

This brief PEST analysis for the telecom industry gives an insight into the factors that can affect how the businesses are required to run.

Answer 2

This answer is related to Pakistan’s telecom sector.

PEST Analysis of Pakistan Telecom Sector:
The Telecom sector all around the world and especially in Pakistan has experienced a tremendous growth in the last few years. The telecommunication sector of Pakistan was awarded the status of industry in 2005 and since then it has been one of the fastest growing sectors of Pakistan quite eminent from various factors such as the mobile density reaching 52.87 in April, 2008 and the number of mobile subscribers reaching 85 million. (Source: Pakistan Telecommunication Authority, Annual report 2007-2008).
PEST stands for Political, Economical, Social & Technological factors of the external macro-environment. A PEST analysis is an analysis of the external macro-environment that affect all firms, Such external factors usually are beyond the firm’s control and sometimes present themselves as threats. Many macro-environmental factors are country specific and a PEST analysis will need to be performed for all countries of interest.

Political Factors:
Political environment of Pakistan is stable in the current situation and country is doing excellent on economic front.
Environment is investor friendly for telecommunication sector.
Government is also supporting telecom industry.

Economic Factors:
Marketers should consider long term and short term state of a trading market.
Inflation is controlling by state bank and under strict eyes but unemployment rate is going up and up with the increase of level of poverty.

Socio-Cultural Factors:
As Pakistan is an Islamic country and people are very strict in case of Islam any thing against the philosophy of Islam on either print or electronic media are treated as against Pakistan.
Most of the people dislike anything extra-ordinary or something which sabotage their culture or subculture.
Companies who are targeting upper-end of market mostly published and aired their advertisement in English language.
In metropolitan cities women are doing work along with their other responsibilities but other than metropolitan cities it is difficult for women to convince their parents and spouses for work.

Technological Factors:
Companies have technology with which they can compete in Pakistan and now companies are investing in their infrastructure to not only expand but also to upgrade their existing structure.
Currently mostly companies are providing Multi-media Messaging Services (MMS), General Packet Radio Service (GPRS), Virtual Private Network (VPN), Pocket Stocks, Conference Calling, Wallpapers Animated pictures Polyphonic ring tones (WAP), and Voice Mail at low price and some are also providing feature that one can see TV channels on their cell.