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.
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 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.
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.
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.