Market analysis and company overview of T Mobile

A German telecom provider T-Mobile generally provides GSM services in US and Europe carrying financial stake with mobile service providers in Eastern and central Europe. It is owned jointly by Deutsche telecom and France telecom; it is the UK’s biggest telecommunication company having a combined customer base of almost 29 million people and more than 727 retail stores across the country.

Globally T-Mobile has around 150 million subscribers, thus making it the world’s tenth largest mobile phone service provider and the third largest multinational after Vodafone and Telefonica. T-Mobile along with Orange makes the UK’s largest mobile operator called Everything Everywhere. Everything Everywhere makes plans thus transforming the industry by giving customers instant access to everything everywhere offering best value for money by offering best network experience in the country. ((http://www.t-mobile.co.uk/services/about-t-mobile/our-company/facts-and-figures/)

International path for T-Mobile:

US Market:

According to the telecom report 2010, on September 2007, T-Mobile USA merged with SunCom wireless with US$2.4 billion, thus expanding their network coverage to Georgia, Carolina, North South, Puerto Rico, U.S. Virgin Islands and Tennessee. In the mid of 2008, SunCom was having 1.1 million subscribers and on February 2009, the deal closed because of T-Mobiles other international markets. T-Mobile does not provide direct access to international roaming network in the United States of America. It can only be accessed by contract customers, named ‘World Class’ a package, which must be included in the customer’s plan before travelling overseas as per the Telecom report 2010.

Mexican Market Analysis:

As per the analysis done by the Mexican Information Technology industry, communications industry grew with a value of US$39 billion, telecommunications industry occupying about 20% of the industry, in the year 2008. Current acquisition of Mexico is about 72 million mobile and 20 million fixed landline subscribers, whereas, T-Mobile is expected to reach around 95 million subscribers for mobile and landline in the Mexican market.

Financial crisis was a big disaster for the sector. The year of 2009 saw development of new market place wherein equipment manufacturers started refocusing on the corporate strategies to attract medium size companies. Average sized companies will have strict rules for funding to buy new equipments that will reduce their expenses on their present infrastructure in the year 2011. (Biznews North Mexico, December 2010.)

Mexico: Telecommunications Fixed Mobile and VoIP Telecommunications.

A mobile telephonic service is the more dynamically growing industry in Mexico as a result of which 2009 was closed with 86 million wireless users. Cheaper rates, good coverage and increasing demand for fixed lines are the important factors which led to the success in this sector.

Today operators are offering 3G and 3.5G services with clear voice, high speed data and video all under one roof and included in single bill with a set fee. However, in Mexico there are still regulatory and financial challenges that should be sorted before real technological junction comes into Mexico. (Biznews North Mexico, 2nd December 2010).

In Mexico, in the year 2009, the mobile market did not see a substantial increase in the subscriber growth because of the economic recession in the global financial crisis. However, the strong point of the mobile sector was demonstrated by double digit growth against surroundings of GDP contraction, whereas, due to the slow economic recovery and penetration rates growing 80%, now the subscriber growth rate is expected to be in single digit figure during 2010/2011.The Telecom Company that rules Mexico in market share in Telcel. Whereas, the 3G range auctions held in July 2010, expecting more competitive market from 2011 onwards (Business News America, 2nd December 2010).

Pest Analysis on Mexican Market:

Political Factors:

Communications Act 2003

As with technology, there are pros and cons as well. There are ways in which people can cause harm to others through calls, hence, for the safety, security of the people; the government provides protection to the people under the communication act 2003.

Environmental concerns:

As per the telecom industry, good environmental management is important to sustain development and long term success in Mexico. Under the guidance of EcoRangers, Environmental Management helps telecom industry to continue to promote sustainable thinking across organization and implant environmental practices in everyday operations. For the protection of the environment, the telecom industry also has recycling options for old and used mobile phones.

Telecommunications Ombudsman:

Telecommunications Ombudsman works for the telecommunication industry and suppliers. They are entitled to get full protection against any issue and this section helps them all the way peacefully to sustain their business in market (TIO 5th December, 2010).

Economic Factors:

Economic fluctuations:

Many connections were terminated and also there was a very steep fall in the number of new subscribers joining in, after the recession and financial crisis because of which Mexican economy was slowed down. All this was the result of little or no income source for the individuals. (L. Nora, 2010).

Social Factors

Mobile society:

Technology makes life very simple and smooth and hence the social lives of all the individuals have shifted towards the information technology. Nowadays, each and every individual around the world and Mexico uses a mobile phone for his business and personal use. It is because of this that the modern day society is called as “Mobile Society”. Even Mexican market is running fast on technology because every individual wants technology in his hands and on the go to make their lives simple and fast paced. (L. Randall, 2010).

Commercialization at Home

In today’s world people have different technologies installed at home such as Wi-Fi internet, Mobile, Fixed land line, fax, VOIP and many more which helps then to a great extent in professional as well as the social life thus starting the commercialization at home. Nowadays, because of the internet many people have the facility of work from home which is made possible only with the help of modern day technology. (L. Randall, 2010).

Increase in the need for communication:

The growth of technology is giving new platform to social life to do better is giving the need for the increase in the technology, thus making life happier and successful.

Technological factors:

Wireless and Mobile communications:

Wireless and wired communication became an important aspect of an individual’s life because of the unique flexibility and convenience provided by them, thus providing an unique edge to the general life. There is a tremendous increase in technology in the market, devices such as palmtops, iPads, are some of the examples of the wireless technologies available in the market overcoming laptops and Personal computers. (IST Report, 2010).

Residential VoIP

VoIP (Voice over internet protocol), is the cheapest service ever working in the internet giving a platform to talk around the work for free thus creating a very different and significant image of itself. The tools used by such technologies include ‘SKYPE’, etc. Also, due to the advancements in the technology people can use this service on the mobile devices. (IST Report, 2010).

Real-Time and On-Demand Communications

In Mexican market communication medium is high demanding, as communication industry in Mexican market is a booming industry and has various scopes followed by tough competition from other telecom giants. To keep the competition and competitors on their toes, different telecom companies are using different strategies and offers beneficial for the customers such cheap call rates, discount calling, free minutes, credits for particular incoming calls, etc. (Telecom Report, 2010).

Strategies for Market Entry

Different companies follow different strategies to enter the new market for launching its products or services. Before getting into a particular market each and every company has to follow the rules and regulations of the market, in compliance with that, T-Mobile wants to enter the Mexican market then it has to obey the terms and conditions of the Mexican market in order to meet the demands of the Mexican market, who will be the target, to keep the best position in the market and also keep a track of the competitors.

Market Development

Because of its best in class network provided by the broad point and the lowest call and data charges T-Mobile has very good reputation in the Mexican market. So, basically, T-Mobile does not have to do much work to have a position in the Mexican market (Mexico Telecom Report, 2011).

According to Riding Gary, regional vice president of T-Mobile USA, the value for T-Mobile is to provide best in quality service with statement “we’ll be with you when you need us.” Now customers will be able to get valuable connections even in Mexico.”(R. Gary, 2010)

Medcalf Jennifer, vice president of Broadpoint from leisure boaters to offshore employees in the Mexico, states that offshore communication is very important and also conveyed the happiness that Broadpoint has with providing their services to T-Mobile subscribers. (M. Jennifer, 2010).

Product Development

This is the right time for T-Mobile to have a place in the Mexican market with new technologies introducing such as Google, Android devices, 4G technology and High speed broadband with the WiMax device with the plus point that telecom industry is the booming industry in the market. Broadpoint covers 100,000 of area in Mexico, thus allowing T-Mobile customers the freedom to roam in Mexican market onto Broadpoint’s voice and data network (Business Week, 2010).

NAFTA’S POLICY OF MEXICAN MARKET

NAFTA has been started on January 1st, 1994. It is an agreement between Mexico, Canada and the US to keep a track of the trade between the three countries. Recently, NAFTA has been restructured with two more additions, NAALC (The North American agreement for Labour cooperation) and NAAEC (The North American agreement for economic cooperation). (ICT NAFTA, 2010).

By removing 49% limit on foreign contribution in improved telecommunication services, NAFTA, is helping ICT industry, thus by removing the limits on foreign investments. NAFTA also providing protection to investors in telecommunications sectors NAFTA investors are 100% responsible of ownership interest for new enterprises occupied in the telecommunications sector without government approval (ICT NAFTA, 2009).

Market Segmentation

The division of market into similar segments to perform in a similar way or cover similar needs is called as market segmentation. (Michael & Ronkaiken, 2007).

Consumer Segmentation

Organizational Segmentation

Market Segmentation

Consumer Market segmentation

Behavioural

Usage, Benefits sought Purchase behaviour, Purchase occasion and benefits.

Psychographic

Personality and Life Style

Profile

Geographic, Demographic, Socio-economic.

Organizational Market Segmentation

Macro Segmentation

Geographic location, industry size and size of Organization.

Micro Segmentation

Buy class, Decision-making unit structure, Choice criteria, Purchasing organization, Decision-making process, Organizational innovativeness.

Segmentation will take place according to the above criteria and will help to reach the desired market for T-Mobile and have better positioning in the market.

Target Market for T-Mobile

Sprint’s leads in 4G technology and T-mobile is making big moves in the Android market by rapidly expanding their new HSPA+ network, thus planning to cover more markets than Sprint’s 4G by 2011. The 4Gis a high-speed network but T-Mobile is still referring 3G network.

T-Mobile is targeting everyone starting from age 14+. Target for T-Mobile would be professional, Non-Professional, Student, Business People, Girls, Housewives. Basically in Telecom Industry target is not specific. It targets every individual with their products and services. Statistical Techniques for developing market, Talent hits a target, no one can hit a target, no one else can see. T-Mobile will be starting with competitive price range which could be affordable by anyone such as cheap calling and data rates compared to rivals (G. Madway and S. Carew, 2010).

Market Positioning

To make its market position better and get more customers, T-Mobile is an official sponsor and supports West Bromwich Albion as well as official mobile network provider for Rangers and Celtic. It also plays a big role in social responsibilities for the betterment of the environment by supporting the go-green strategy, nowadays a well known concept for the promotional and advertising strategy. (T-Mobile Annual Report, 2009).

T-Mobile concentrates on best marketing campaign, provides promotional activities, advertising, better marketing activities, concentrate on providing better customer service, providing more training to their staff and hence encouraging them to deliver best customer service to increase the customer experience. All this is done to make sure that they have captured the best position in the market to be at par or on top with their rivals Verizon and AT&T. (BBC News, 2010).

T-Mobile also claims that it is the largest provider of 3G services in the nation. The latest ad campaign of T-Mobile is against its rivals Verizon and AT&T stating they aren’t the only Smartphone providers in the world. A unique advertising strategy adopted by T-Mobile by featuring Catherine-Zeta Jones has done wonders for T-Mobile and was considered as a very successful campaign against its rivals. The Hollywood actress is used as a counterpoint to two men, one carrying the other piggyback stating that T-Mobiles 4G network is faster than the iPhone in terms of video conferencing. (BBC News, 2010)

In the growing world of technology, T-Mobile faces a lot of competition from the US market, especially from its rivals Verizon and AT&T. T-Mobile is placed at No.4 position in the US market after AT&T wireless, Verizon and Sprint capturing the first three spots on the podium respectively. In 2009, T-Mobile was having 34 million subscribers and a profit of $306 million, whereas in the year 2008 alone T-Mobile had a profit of $484 million. T-Mobile not only fights three biggest rivals but will also have to start 4G services to come over WiMax service by Sprint as well as LTE based products provided by AT&T and Verizon (Telecom Report, 2010).

Market Mix

Product: A product is provided by a company or an individual to market as well as to offer to other people. A product could be anything that is offered to a market for use, attention, consumption or to satisfy a need or want (Armstrong and Kotler, 2009, page 278). The product that is offered to its customers by T-Mobile is the telecom services. The products and services offered by T-Mobile to its customers are Wireless connection, fixed-line connection, Broadband connection and, Mobiles and other different technologies.

Price: Price will be defined as “The amount charged for the product or service that consumers exchange for the benefit of having or using the product or service” (Gary and Philip Kotler, Armstrong, 2009, page 353). Every company should understand the importance of giving value for money to their customers. T-Mobile being a successful company takes special care to set prices for its products such as discounts, payment periods, credit terms, list price and allowances that come together to set up the price for products.

Promotion: Promotions are activities which help to communicate with customers about products and services with the help of advertising, sales promotion and personal selling (Armstrong and Kotler, 2009, page 63). Various ways are used by T-Mobile to promote its products and services such as advertising campaigns, organizing events, sponsorship, publicity through Radio, TV, etc. Nowadays online marketing and social network playing plays a vital role for the promotion of products and services.

Place: A place is an important factor when things come to competitive market strategy. Place comprises company activities where products are available to target customers. Considering mobile, wireless or wired connection and broadband at present time everyone needs them. Every place is specific for these products and services because these products and services became a part of daily life of an individual. It could be educated or uneducated, professional or unprofessional (Armstrong and Kotler, 2009, pg 63). T-Mobile selling its product in two ways, one is physical stores and second is virtual stores like online presence “WEBSITES”.

SWOT Analysis on T-Mobile:

Strengths

T-Mobile has a consistently growing customer base due to its unmatched services in the market.

T-Mobile is very well regarded for its 3G network in Europe and is currently growing in the US.

T-Mobile acquires a very strong brand equity as well as recognition in the US and European market (T-Mobile Annual report, 2009).

T-Mobiles alliance with big companies such as Orange, Broadpoint in mobile services and technologies has given it a cutting edge towards others. (BBC news, 2010).

Weaknesses

Even though T-Mobile has its presence in the big telecom markets, however, it does not have occurrences in the key rising markets which can give its economy a substantial increase.

T-Mobile is facing steady decline in its average revenue per user because of its weak network coverage in the UK. (T-Mobile Annual report, 2009)

Opportunities

T-Mobile would be the first to provide telecom service provider to launch Google based Android mobile in the US market (BBC News, 2010).

T-Mobile is concentrating on achieving more market share by concentrating its expansion on the mobile internet market.

Growth in the 3G network coverage could be an opportunity for T-Mobile in the US market.

Threats

Recession and economic slowdown proved to be a threat for T-Mobile in the US and European markets.

Intensive competition from rivals like AT&T, Verizon and Sprint’s in the US market also proves to be a threat for T-Mobile.

Recommendation:

As I have found by studying the Mexican market for T-Mobile, T-Mobile has good hold over the market in certain fields and countries, however, in certain other countries especially in the US it has to face a tough competition. Since its rivals are already present in the market with a very strong hold. My personal recommendation to T-Mobile would be to enter the market ith special, unique and diversified tactics mixed with technology such as 4G network for broadband, cheap voice and data rates, good network coverage for voice and data browsing. The best advantage for T-mobile is that they are in partnership with Broadpoint for their network. The major step T-Mobile has taken toward its advancement is that it has introduced Android devices with Google technology, so overall this is the best time for T-Mobile to enter the Mexican market and dominate it with the new technology. As all countries are recovering from financial crisis called recession so it is quite obvious advice for T-Mobile to be careful till Mexican market fully overcome its financial crisis and T-Mobile can start penetration with its existing network in Mexican Market.

Conclusion

Telecom Industry is a booming industry in Mexico and has lots of scopes in same. It has around 72 million wireless subscribers and around 20 million fixed line subscribers and T-Mobiles expectation is much higher for next coming year. T-Mobile is providing its network with the help of BroadPoint in Mexican market and its network its network has got good reputation in Mexican market. T-Mobile is about to launch Google Based Android Devices Broadband service with latest technologies in Mexican market. Being first Android device provider T-Mobile is in demand. T-Mobile has got right time and much more opportunities to enter Mexican market.