<p style="text-align: justify;">Emirates Telecommunication Group Company PJSC, known as Etisalat, is a multinational Emirati-based telecommunications services provider, currently operating in 15 countries across Asia, the Middle East, and Africa. It engages in the provision of telecommunication services, media, and related equipment.</p>
<p style="text-align: justify;">The company was formed in 1976, with it is headquartered in Abu Dhabi (Forbes, 2021). Etisalat has expanded its business outside its home market and owns a business in many regional operators. The company&#8217;s major brands are Pakistan-based Ufone, PTCL, Saudi Arabia-based Mobily, Moroccan-based Maroc Telecom, and West African-based Moov.</p>
<p style="text-align: justify;">Porter&#8217;s five forces analysis is a valuable tool to assess the business and financial risk Etisalat is exposed to in the global telecommunication sector.</p>
<h2 style="text-align: justify;">Competitive Rivalry in The Market</h2>
<p style="text-align: justify;">The number of competitors is essential as all the telecommunication firms in the sector share the same market. The only competitor of Etisalat in UAE is Du. The intensity of competition between them is high. Companies are trying their best to maintain their customer base and trying to attract customers to each other.</p>
<p style="text-align: justify;">The size of the network and coverage determines the size of market share. In the telecommunications sector, all aspects of rivalry, including price discounting, introducing new products, service improvements, and advertising campaigns, play an essential role. (Nikbin et al., 2012).</p>
<p style="text-align: justify;">Etisalat recorded 10.54 million mobile subscribers, while Du accounted for 7.736 million in the UAE as of September 2019 (Mordor Intelligence, 2019). Therefore, the competition level is high between the rivals.</p>
<h2 style="text-align: justify;">Threat of Substitutes</h2>
<p style="text-align: justify;">The substitute is a product offered that offers the same service as the firm&#8217;s product. The availability of better alternative products is moderate. The threat is increased when there is a low switching cost, and better alternatives are also widely accepted.</p>
<p style="text-align: justify;">The telecommunication industry is revolutionized in the last two decades. Information and Communication Technology (ICT) services became cheaper, the price of high-speed internet, and mobile cellular services dropped, a transformation that has brought great benefit to consumers (Parkers &; Teltscher, 2011).</p>
<p style="text-align: justify;">The threat of substitutes is extremely low as the company is also producing both landline and mobile telephony services, which makes them safe with the arrival of any new substitutes. The best part is that Etisalat is also providing the products which are closest substitutes. Even though there doesn&#8217;t seem to be any substitute available, things might change in the foreseeable future.</p>
<h2 style="text-align: justify;">The Threat of New Entrants</h2>
<p style="text-align: justify;">The threat of new entrants is assessed to be low. The threat of new entrants into an industry is related to entry barriers within the industry and geographic boundaries. (E. Dobbs, 2018). One of the significant problems in regulation and initial capital requirement. To cover fixed operating costs, startups need a considerable amount of cash.</p>
<p style="text-align: justify;">The government has put restrictions on new entrants in UAE (Abdullah, 2013). There are only two established companies Du and Etisalat. The new entrant must come with suitable products and cost-efficient products to capture market share, which seems difficult. These companies control the whole market. They provide complete solutions with bundled offers. Considering the factors mentioned above, the threat of new players breaking into the sphere is moderate.</p>
<h2 style="text-align: justify;">Bargaining Power of Buyers</h2>
<p style="text-align: justify;">The bargaining power of the buyers depends upon the nature of the industry and the value buyers it brings. Other factors that affect buyers&#8217; power are buyers&#8217; concentration, switching cost, and available substitutes. The buyers of telecommunication products are individuals and corporates. The most influential factors in their decision-making are price sensitivity and the perceived quality of service (Kim et al., 2011).</p>
<p style="text-align: justify;">Price sensitivity is a function of the overall buying behavior of buyers in the market, the income of the buyers, and the value that is accorded by these buyers to the products and services offered by the participants in the telecommunications industry. The individual buyer has a restricted purchasing power as compared to corporate buyers. Therefore, in total the bargaining power of buyers is low.</p>
<h2 style="text-align: justify;">Bargaining Power of Suppliers</h2>
<p style="text-align: justify;">If suppliers have more bargaining leverage against the firm, they are more powerful and can dictate terms (Brown, Fee, &; Thomas, 2009). In the industry, suppliers have moderate to low bargaining power. There are two major suppliers in the telecommunication industry one material or equipment provider, and the other is a human resource provider.</p>
<p style="text-align: justify;">The supplier market is saturated, Chinese companies compete with other suppliers, and their competition decreases equipment prices (Foreign Policy, 2019). It provides an edge to the industry. If the buyer&#8217;s product is better than the other group of the supplier, the company will need to hold, affecting its position.</p>
<p style="text-align: justify;">The workforce suppliers are the second element; it is affected by the availability of a qualified and experienced telecommunications sector workforce and the consolidation in the regional labor market in the telecommunications sector. Therefore, suppliers have low bargaining power.
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<h2 style="text-align: justify;">References</h2>
<p style="text-align: left;">Abdullah. (2013). Strategic Analysis on Etisalat. Available at: https://huzaifaabdullah.wordpress.com/2013/07/18/strategic-analysis-on-etisalat/<br />
Brown, D. T., Fee, C. E., &; Thomas, S. E. (2009). Financial leverage and bargaining power with suppliers: Evidence from leveraged buyouts. Available at: Journal of Corporate Finance, 15(2), 196-211.<br />
E. Dobbs, M. (2014). Guidelines for applying Porter&#8217;s five forces framework: a set of industry analysis templates. Available at: Competitiveness Review, 24(1), 32-45<br />
Forbes. (2021). Etisalat. Available at: https://www.forbes.com/companies/etisalat/?sh=774a07d62761<br />
Foreign Policy. (2019). The Improbable Rise of Huawei. Available at: https://foreignpolicy.com/2019/04/03/the-improbable-rise-of-huawei-5g-global-network-china/<br />
Kim, K. K., Ryoo, S. Y., &; Jung, M. D. (2011). Inter-organizational information systems visibility in buyer–supplier relationships: the case of telecommunication equipment component manufacturing industry. Available at: Omega, 39(6), 667-676<br />
Mordor Intelligence. (2019). Analysis of the Telecom Sector in the United Arab Emirates. Available at: https://www.mordorintelligence.com/industry-reports/analysis-of-the-telecom-sector-in-the-united-arab-emirates-industry<br />
Nikbin, D., Ismail, I., Marimuthu, M., &; Armesh, H. (2012). Perceived justice in service recovery and switching intention. Available at: Evidence from Malaysian mobile telecommunication industry. Management Research Review, 35(3/4), 309-325.<br />
Parkes, S., &; Teltscher, S. (2011). ITU sees 5 billion mobile subscriptions globally in 2010. ITU International Telecommunication Union [Online]. Available at: www.itu.int/newsroom/press_releases/2010/06.html.</p>
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