In Focus: Business tools, Porter’s Five Forces

Original Blog post by Vivek Thakkar: https://blogs.ubc.ca/vivekthakkar/

Picture retrieved from: http://cdn.gottabemobile.com/wp-content/uploads/2013/11/ATT-Logo.jpg

Vivek raised an important point with regards to porter’s five forces when he mentioned there are a strong barriers to entry in the Canadian telecommunication market. This means that the threat of new entries of telcom companies is low and the existing telcoms in the Canadian market are going to be profitable for a long time.

In a report by OECD, it found that Canadians pay one of the highest prices for one of the worst telecom services in the industrialized world. The entrance of AT&T would have increased competition and in the long run, lower the prices of telecom services in Canada. The suppliers, Bell, Roges, Telus and Wind, face very minimal threats of substitutes as there are not many services out there that can replace them. There is also a high demand for telcom services for day to day usage and hence the telcom companies in Canada seems to have solidified their positions, enjoy high profits and maintain control over the market here.

What all these means is we as consumers, are paying for the inefficiency of telcom services here as they have minimal incentives to improve. I would have definitely loved to see AT&T or other telcom providers enter the market really just for the extra options and improvement of telcom services throughout Canada

References/Updates:

High telco cost: http://rabble.ca/blogs/bloggers/openmediaca/2013/07/confirmed-canadians-pay-some-highest-prices-some-worst-telecom-se

http://www.itworldcanada.com/article/oecd-again-assailed-for-canadian-telecom-ranking/43094

AT&T say no to Canada: http://www.bnn.ca/News/2013/9/17/ATT-looked-at-entering-Canada-nixed-idea.aspx