SAMPLE LS 10 INDUSTRY STUDY:

Industry Life Cycle

Digitel established Sun Cellular in September 2001 to provide wireless

telecomunnications services. Sun Cellular commercially promoted its services in March

2003. It is therefore relatively new since it just started. Sun Cellular entered during the

hype of competition of the two leading telecom companies – Globe and Smart.

The growth stage allows differentiating a company’s offerings from the other

companies in the industry. Sun Cellular heightened its offers due to its successful launch

of unlimited services. Globe focused on the success of their post paid plans and loyalty of

subscribers. Smart focused on their success on low-end prepaid plans and in having the

biggest in-reach subscribers. The telecom industry is therefore focusing on the

standardization of their products and services. Also in this stage, if there is success in

market for the firm, there will be growth of sales due to the increasing demand. For Sun

Cellular, there was an increasing demand for unlimited services since people opt to be

more efficient by spending less but still producing more output. Also, because of the

different financial crises, people choose to subscribe to these unlimited services in order

to spend less money. As said by Ricci Javier, Senior Business Development of Nokia

handling Sun Cellular, “People can’t do without text and call.” Thus, there will be

continued increase in profits for these firms. Due to the wide acceptance of these

services, intense market rivalry surfaced – another key factor in this stage. Different

telecom companies now promote similar products and services which results to strong

competition between the competitors in the industry.

The telecommunications industry could also have a long growth phase since there
are constant upgrades of features and services as technology improves. There are constant

improvements in the products and services, as well as constant additions of value added

services.

Industry’s Key Success Factors

1. Telecommunications industry broadens its network to different parts of our

country. The expanding network of Globe, Smart and Sun has reached different

cities and provinces in major regions. Specifically, the different companies of

the telecom industry offer their broadband services in retail stores all over the

country.

2. Globe, Smart and Sun also offer a wide variety of package deals with their

broadband services. Sun Cellular offers value added services like 3G, GPRS,

downloads and a lot more. Globe promotes free additions to the plans they

offer, like different hardware components of a computer. By their offerings of

promo plans and other benefits added to their services, more consumers support

and subscribe to the services of these companies.

3. In addition, subscribers grew in number because the telecom industry widened

their coverage and network, thus expanding services like broadband. The

companies in the telecom industry invest millions to broaden their capacity and

coverage to increase their subscribers.

4. Telecom companies achieve customer satisfaction by offering customer

services. Globe, Smart and Sun encourage their customers to ask and inquire

about their products and services. There is also efficient feedback from the

companies, thus assuring the customer of their needs. The increasing demand of
 customers will encourage the growth of the companies in the telecom industry.

5. Globe, Smart and Sun offer similar affordable range of prices in their products

and services. They have similar prices in their promo plans as well. They offer

the most reasonable prices for products and services seen in their broadband

and unlimited call and text services. The companies’ international services also

offer rates within the means of their target market. Also, due to the increasing

accessibility of computers and internet, it resulted to the emergence of different

affordable telecommunications services.

SAMPLE PARTS OF AN INDUSTRY STUDY:

D. Marketing & Sales Management

Brief Profile of Marketing/Sales Organization, Advertising and Promotions

Sun Cellular launched its wireless mobile services offering local and international

calls, SMS and multi-media messaging, international roaming and value added services.

Sun Cellular started the unlimited services in the Philippines by launching 24/7 Call and

Text Unlimited and 24/7 Text Unlimited. Sun Cellular invests almost 300 million Pesos

every year to improve their network infrastructure.

Sun Cellular has the most reasonable price for products and services, due to its

renowned Call and Text Unlimited services. Sun Cellular also offers plans for its postpaid

business. Its international services offer the most affordable mobile IDD service and

broadband services. It offers the most reasonable roaming call rates. The expanding

network of Sun Cellular has reached different major cities and provinces here in our

country such as Metro Manila, Bulacan, Cavite, Laguna, Pampanga, Batangas, Nueva

Ecija, Cebu, Bacolod, Iloilo, Davao, Cagayan de Oro, Zamboanga, and General Santos.

Its roaming services has also reached different countries in the world like United States,

China, Hong Kong, Canada, Singapore, Thailand, Malaysia, Brunei, Guam and Macau.

Sun Cellular has widened its network and has grown rapidly because of its

pioneered Unlimited services, instead of competing with other networks by having the

same price of service. This has influenced small, medium and large enterprises.

Sun Cellular’s advertising agency creates photographic visuals with artists,

models and other celebrities as endorsers. The advertisements are appearing in different

forms of media like television, billboards, magazines, etc.

E. Current importance to and inter-relationships with economy and other industries

The Philippines was represented by 10 top leading telecommunications

companies in the CommunicAsia, Singapore’s biggest international communications

technology fair. Our country’s presence in the fair shows our willingness to open our

range to advanced global networks. The companies which led our country in the

CommunicAsia have great success with business in our local market. The Philippines has

already been dubbed as the “world’s texting capital” and thus reflects our growing market

in wireless services. Through our country’s innovation in telecommunications, we can

better develop these services to overseas market. This will also ensure the industry’s

growth and profitability. This will eventually raise our country as an IT-driven economy.

The Philippines has showed interest and importance to local telecommunications, which

will be useful in creating new corporate contacts and networks within and outside our

nation.

Industries’ Effect on GDP

Franchising industry accounts for 5% of GDP and retail industry accounts for

15% of our country’s GDP, while telecommunications industry contributes only 1% to

our GDP. Agriculture, fishery and forestry accounted for 17.8% of our GDP. These are

some of the industries that affect our countries Gross Domestic Product.
F. Marketing practices/strategies/characteristics of dominant players

Three of the top leading telecommunications companies are Smart

Communications Inc., Globe Telecom and Sun Cellular. These three companies compete

with their up to date products and services that they offer. Due to increasing accessibility

and affordability of internet and computers, broadband services in telecommunications

surfaced.

1. Product varieties offered and range of quality vs. prices offered

These three companies compete with almost the same quality, only differing in a

minute amount of speed. All with almost 2Mbps speed of broadband connection. Also,

they do not compete much in prices. The three companies all have similar promo plans

which offer similar range of prices. Their prepaid kits are priced for P2,500. The three

companies also offer the same promo plans: Plan P799 and Plan P999. They also have the

same range of lock-in periods between 12 to 24 months. However, Globe Telecom offers

inclusions of free speakers and mouse and other varieties offered with Plan P995. In

general, these companies offer the same range of services priced with similar values.

SUN CELLULAR BROADBAND:

Affordable Plans
SBW
Easy
Plan 799 SBW SBW Plan 649
Subscription Broadband
SIM Plan 799 Bundle
Plan 799**
Only
Burstable
2Mbps
Speed*
Usage
Unlimited***
Allowance
Monthly Service P799 P799 P799 Additional
Fee P649/month on top of
 Postpaid MSF

One-Time
P2,500 n/a Waived Waived
Modem Charge
No Holding 6 24
Holding Period 24 Months
Period Months Months

SMART BROADBAND:

OFFER PLAN 999 PLAN 799 PREPAID

SPEED Up to 384 kps Up to 2 Mbps Up to 2 Mbps
NO. OF HOURS Unlimited Up to 60 hours free per Pay per use for
USE month (P10 for every connection P10 for
30 minutes in excess of every 30 minutes
the free hours)
CONNECTION Fixed wireless Wireless Connection Wireless Connection
connection (free (Via USB Modem) (Via USB Modem)
installation fee)
REQUIREMENTS Subscriber Subscriber Application None
Application Form, Proof of Address,
Form, Proof of Proof of Identification,
Identification Financial Documents
(Any of the 3
documents : Latest
Income Tax Return,
Current Bank Statement
or Bank Certification
letter)
TOTAL INITIAL Php 999.00 Php 1,598 (2 months
PAYMENT advance service fee)
LOCK-IN 12 months 24 months
PERIOD

GLOBE BROADBAND:
 Offer Package Perks
Plan Php 995 Up to 384 kbps * Waived installation
Internet + Landline fee!
* No advanced
Plan Php1,295* Up to 1 Mbps
payment!
Internet + Landline
* No NDD charges if
Plan Php1,995 Up to 2 Mbps you call another
Internet + Landline Globe Landline
anywhere in the
country using your
Globe Landline!
Globe Broadband Surf the Internet for * Prepaid kit for Php
Prepaid Visibility only Php 5.00 per 2,500 only!
15 minutes for up to * Free initial 1.5
2 Mbps! hours of internet
surfing!
* Fixed wireless plans of up to 512 kbps Internet + Landline at Php 1,295 per month available in NCR only.

Variety of packaging used

Smart Bro

Globe Broadband

Sun-Cellular Broadband

2. Extent and intensity of advertising and promotions

 The telecommunications companies opt to advertise their products through

commercials showed in local television stations. In advertising and promoting their

broadband wireless services, the three main telecommunications companies each have a

separate site to feature the service. Sun Cellular promotes their broadband service as the

most affordable and most advanced of all. They claim to have pioneered this broadband

service, just like the Unlimited Text and Call Service they first offered. Globe Telecom

showed to have the least speed of broadband service of the three companies. However,

they promoted free additions to the plans offered, like different features in a computer

(speakers, mouse, kinds of LCD, etc.). Since all of the companies offered the same

quality of service with the same price value, these companies compete by selling their

company name. Famous artists represent these companies through their appearances in

posters, commercials, billboards and other forms of advertisements.

“Digitel has set aside a budget of P12 billion for expanding its network this year,

to be funded by internal cash and borrowings.” Globe Telecom company, however, will

cut its general capital spending to at least $350M from $420M, thus also affecting their

budget for advertisements and promotions. In general, mobile advertising and marketing

grossed $3 billion globally in 2007, and that is expected to grow to $19 billion by 2011.

3. Channels of distribution used

Sun Cellular offers their broadband services to only a few retail stores in Metro

Manila. It is only available in retail stores in Makati, Manila, Mandaluyong, Quezon City,

Las Pinas, Paranaque, Pasay, Pasig, and will hopefully reach the rest of Metro Manila

soon. Smart Bro is only available in selected areas as well, specifically HSDPA areas.

However, Globe Broadband offers their services in retail outlets all over the country,
from NCR, South Luzon, North Luzon, Visayas and up to Mindanao. So in general, these

companies used Indirect-Marketing Channel wherein producer passes the product to

retailers, then retailers pass it on to the consumers.

G. Economic Trends

It was hard for Sun cellular to start its operations with two big companies already

leading the telecommunications industry – Globe and Smart. That basically was the

contraction of the company’s business. It became very challenging for Sun to be the 3rd

company to start in the telecommunications industry. According to Ricci Javier, Senior

Business Development of Nokia handling Sun Cellular, it even came to a point wherein

rumors surfaced that Sun cellular would close down because business was running low.

In October 2004, Sun cellular launched its Call and Text Unlimited services which started

the growth and expansion of the company. Because of the successful launch of the

unlimited services, Sun cellular in 2005 invested millions to expand their capacity and

coverage to increase their subscribers. Indeed, Sun cellular’s subscribers eventually grew

in number as the unlimited services provided gradually expanded. However, as the

number of subscribers grew, factors affecting the company’s standing also surfaced.

Subscribers complained that the unlimited services were unexpectedly cut-off before the

expiry dates. Issues concerning about the quality of their signal also affected the business

because more and more subscribers withdrew their support to the company. According to

Mr. Javier, Smart took advantage of Sun’s situation by pushing the idea to the public that

Sun has low-quality signals. Eventually, Sun cellular recovered by improving what Smart

and even Globe cannot give – unlimited services. They provided network improvements

which will help cope with the increasing demand in 24/7 call and text unlimited service.

Telecommunication companies compete by giving what other companies cannot

give. Just like Sun cellular, other companies cannot match their unlimited services. That’s

why they compete by improving the quality of unlimited service. Even though Sun caters
to low-end market, one cannot say that their services are cheap because they also cater to

families and big companies due to the benefits of unlimited call and text services in

communication inside companies. Sun has also developed 3G network services to add up

to their unlimited service thus increasing its quality. As Mr. Javier said, “At the end of

the day, it boils down to earning money.”

Text Unlimited Rates

GLOBE

PRICE VALIDITY
P20 1 day
P40 2 days
P80 4 days

SUN CELLULAR

PRICE VALIDITY
P15 1 day
P20 2 days
P50 7 days
P150 30 days
SOURCES:

www.nscb.gov.ph/sna/2008/4thQ2008/2008aff4.asp

http://www.mobilepundit.com/2006/03/28/telecom-contributes-1-to-gdp/

http://www.manilatimes.net/national/2008/july/13/yehey/career/20080713car3.html

http://business.inquirer.net/money/topstories/view/20080707-146843/Franchising-

industry-accounts-for-5-of-GDP

http://www.citem.com.ph/DisplayIndividual_newsarchive.asp?ID=69&search=automate

http://www.manilastandardtoday.com/?page=news4_may20_2008

business.inquirer.net/money/breakingnews/view/20090203-187203/Globe-Telecom-to-

trim-capex-by-16

http://business.inquirer.net/money/breakingnews/view/20080527-139042/Sun-Cellular-

says-it-has-6-M-subscribers

http://www.globelines.com.ph

http://smart.com.ph/bro

http://www.suncellular.com.ph/broadband.php