Question:
Discuss about the Report On Optus Telecommunication.
Optus Telecommunication is the second largest telecommunication organization in Australia with a majority market share. It is the part of the Singaporean Singtel, which is an international multinational telecommunication organization. In Australia, the company operates under the name of Optus and has the possession of several other organizations in the telecommunication field. It maintains several wholly owned subsidiaries in mobile telephony market, network services and ICT services market. The company has entered in the market recently, however, in order to grab the maximum market share and attain customer loyalty, it is providing excellent services. In this regard, the organization has established and maintaining its own network infrastructure. The company is also using the wholesale services of Telstra and National Broadband Network for providing networking services to the customers. Its networking infrastructure is used to provide services directly to the users and to provide services to other service providers also. It also provides broadband and wireless internet services to customers.
Optus is one of the biggest telecommunication organizations in Australia. It has several independent subsidiaries which assist in providing excellent services to the customers. The biggest competitor of the organization is Telstra and in order to retain substantial market share, the organization needs to provide excellent networking and other related services to the customers. However, with the size of and operations, the challenges for the organization also become enormous. In a recent report, it has been identified that the organization has issues in its financial and operational procedures. The report has shed light on the credit management of the organization, management of fixed assets and balance sheet reconciliation. The report also identifies the security administration issue in the commercial management system of the organization. It can be critiqued that there is significant lack of control over the development and ownership of policies and procedures in the organization. There is absence of formal resolution process for debt control and security in corporate customers’ contracts (Askew & Lacy, 2003).
Other than that, there are several external factors such as social factors, technological factors, market factors and political factors which may impact on the operations of an organization.
The social and the economic factors refer to the problems associated with the economic conditions and other environmental factors of a country. The socio-economic conditions of the country directly impact on the purchasing power of the customers and eventually impacts on profitability of the company. Several factors such as the purchasing power of the customers and the inclination of the customers towards a particular service influence the overall sales of the organization. The risks associated with the customers, competitors and investors are termed as strategic threats to the organization. With the increased competition in Australian market, the telecommunication organizations are declining their prices to obtain maximum customers (In, 2009). However, it is reducing the overall profitability ratio of the organization. Similarly, different organizations in the telecommunication industry are implementing different strategies to expand their market share. Therefore, it is important to implement different strategies, discounts and loyalty bonuses to increase customer loyalty and market share. The telecommunication operators have already designed overhaul and dynamic pricing model for the data and network (Delmon, 2009).
Other than that, the political risks are also quite prominent in the telecommunication sector. The compliance risk refers to the risk originating in the telecommunication sector sue to the compliance, law, regulation or corporate governance. In the telecommunication industry, there are several regulations and compliance law related to the pricing and the customer privacy. It is important to abide by these policies to avoid penalties and regulatory measures.
Other than that, the organization also faces several risks related to industry ecosystem and technological advancements. The telecommunication industry is one of the most advanced industrial sector and different companies are regularly indulging in innovation s to drive their individual performance. Therefore, it is important for the telecom organizations to adopt new technology and skills so that it remains ahead of the competition. The major technological challenges for the organization are system failure and insufficient signals. Moreover, the networking infrastructure also impacts on establishing proper connections between the users (Koulafetis, 2017).
The market factors refer to the competition in the market. The competition in the telecom market is immense due to huge available market and profitability. There are a few large market players in the industry which regularly introduces new strategies to attract more customers. Amidst this competition, it is very difficult for the business organization to establish a unique position for itself in the market (Creelman, 2013).
Another significant challenge for the organization is the cybercrime and cyber security. In every online business or digital business, the possibility of cybercrime is very high. The cybercrime can impact on the service providers and the customers. In the telecom industry, a significant amount of customer information is used and obtained. It includes private information such as the name and address of the customers. If this information is leaked it can intrude the privacy of the customers. Other than that, Optus also provides data connection and voice communication to the customers. In this case, if snooping occurs wherein the private communication of the customers is recorded and used in an unethical manner, it can impact on the privacy of the customers. Eventually, it can tarnish the image of the organization. The cyber-crimes encompass all the activities which can disrupt the performance of the organization. The telecommunication companies suffer from the risk wherein, cyber criminals commit digital crimes to gain unauthorized access to the confidential information of an organization. The hackers also try to obtain the telephony and the internet services without paying for it. Some of the cyber criminals try to access the codes and encryption of the organization and use it to access the services without paying for it. They also sell this information to the customers (Hanseth & Ciborra, 2007).
It can be critiqued that the organization is facing significant challenges and issues. In order to address these issues, the organization should take some strategic initiatives to address these issues and challenges faced by the organization. In the following section, a few recommendations are made to address these challenges:
Infrastructural Challenge: In the telecommunication industry, one of the foremost challenges is the lack of infrastructure. Australia has unique physical and geographical location. The populated areas of the country are concentrated at few, geographically distant locations. The climatic conditions of the country are also harsh which makes the establishment of mobile network difficult. However, it is important that there is provision of adequate infrastructure for rural and regional Australia so that competitiveness of rural and remote economy can be maintained. It is also important that all the rural and the remote communities have universal access to broadband connection to ensure that there is economic prosperity and social inclusiveness. The companies can also access larger section of market with the help of reliable internet connection. The company should establish its own networking infrastructure so that it can access these markets. The network should also focus on increasing the accessibility, speed and availability so that the organization can profit from the new network (Tiwari, Lane and Alam, 2015).
Legislative Policies and Laws: A country’s laws and policies impact on the operations and the profitability of the organization. These laws are designed to establish protect the consumers from any kind of exploitation. Other than that, the government is also focused on establishing a good level of competition so that the prices and quality level of the organizations remains maintained. Other than that, the laws related to taxation, privacy control and bandwidth usage also impacts on the operations of the organization. If the telecom organization does not follow these laws, then the government may impose heavy penalty on it. Firstly, in order to abide by all the laws, the organization should appoint an officer who identifies the trends and the changes in the government policies. It is necessary to immediately implement these laws so that the organization does not have to give penalty. Most of the large business organizations have to abide by the employment policies and laws. Optus Communication should also follow all the employment laws and follow the government policies while offering employment to the people (Hong Kong Institute of Bankers, 2013).
Social and Economic Risk: The social and economic factors impact in the overall profitability of the organization. The business organizations cannot control external factor like economy of the country. However, it has to adapt its pricing model according to the economy of the country. If the economy of the country is not doing well, the organization can reduce the prices of the services so that the maximum users can avail the services. On the other hand, if the economy of an organization is performing well, it can increase the prices of the services offered so that maximum users can avail the services (Iverson, 2013).
In every industry, there exists a significant amount of competition between the organizations offering similar products or services. A major issue faced by the telecommunication organizations is maintaining a large customer base as all organizations target the same set of audience. However, it is easier for the large organizations to attract more customers due to their brand image. However, in order to attract a large amount of customers, the organization should focus on offering data and voice plans to them. The company can also offer loyalty bonuses and discounts so that a large number of customers are attracted towards the organization (Edwards & Bowen, 2013).
Another challenge for the organization is cybercrime and cyber security. The cybercrime can impact on the private and the personal lives of the service providers. Moreover, cybercrime can also impact on the image of the organization. In order to combat this risk, the organization should be focus on implementing a proper security infrastructure in the organization. It is important that the business organization implements a proper IT infrastructure in the organization. Other than that, appropriate personnel should be recruited for the maintenance of the system. Outsourcing this work can increase the security risk to the organization. Therefore, it is important that the organization implements appropriate IT infrastructure in the organization. The IT managers recruited to handle the system of the organization should be skilled and well-versed with the security system of the organization (Walker, 2013). The company should also follow the guidelines and the policies provided by the government to maintain the security of the organization. The organization should also control the amount of services outsources to the third party as it increases the security risk to the organization. An intrusion detection system can also be designed and implemented to control malicious traffic inside the security system of the organization. The system must be up-to-date with the latest technology and should be able to detect the latest intrusion attacks on the organization (Edwards & Bowen, 2013).
It can be discussed that several legislative laws are not favorable for the organization. The government bodies have the responsibility to regulate the functioning of the telecommunication industry; however, the companies should also negotiate on these laws so that they can be made flexible. The company should also adjust its operations according to these policies so that amendments can be made which will be beneficial for both the organizations.
The market competition is also a significant challenge for the organization. Telecommunication is a heavily regulated industry with a large number of regulations. Moreover, the competition in the industry is also heavy; therefore, it is important that the organization takes strategic actions to combat the competition in the industry. In order to compete with the competitors, it is important that the organization create appropriate marketing strategies (Walker, 2013). A business organization can use different kinds of marketing tactics and implement different marketing tools to increase the number of customers. The organization should use different kind of broadcast media channels and promotional methods to increase their outreach to the customers. In broadcast media, the organization should use different methods such as newspapers, radio and television to increase their outreach. Other than that, it can also introduce other methods such as celebrity endorsement or introduction of discounts to increase its market share (Hopkin, 2013).
Conclusion
Optus Communication is one of the largest telecommunication organizations in Australia. It is an independent subsidiary of Singaporean Singtel which is multinational telecommunication organization. The telecommunication organization faces significant challenges in their operations. The report has highlighted a few of these issues. The major threat to the operations of these organizations is political risk, compliance risk, operations risk and market risk. The report has discussed different risk and challenges in the operations of the organization. It has also discussed various strategies which can be used to address these issues and risks. The organization can implement tactics and tools related to marketing to increase their outreach to the customers. Other than that, the organization should also implement appropriate IT infrastructure security system. It can also establish an intrusion detection system so that no foreign party can access the valuable information of the system. The compliance risk is another significant risk for the telecom organizations. If a business organization fails to comply by the laws and legislations of the government, they have to face heavy penalty from the government. Therefore, it is important to be compliant by the laws. A business organization can become compliant by recruiting officers who are vigilant regarding changes in policies and can strategize how to implement them in the organization.
References
Askew, K., & Lacy, C. (2017). Optus report finds major problems. The Age. [Online]. Available at: https://www.theage.com.au/articles/2003/03/17/1047749691015.html [Accessed on: 12 September 2017].
Tiwari, S., Lane, M., & Alam, K. (2015). The challenges and opportunities of delivering wireless high speed broadband services in Rural and Remote Australia: A Case Study of Western Downs Region (WDR). Australian Conference on Information Systems.
Gentzoglanis, A. (n.d.). Risk Management & Business Strategies in the Telecommunications Industry. Retrieved on 14 September 2017 from https://www.itu.int/ITU-D/finance/work-cost-tariffs/events/tariff-seminars/havana-07/doc_8_gentzoglanis_en.PDF
(2014). Top 10 risks in telecommunications 2014. Retrieved on 14 September 2017 from https://www.ey.com/Publication/vwLUAssets/EY_-_Top_10_risks_in_telecommunications_2014/$FILE/EY-top-10-risks-in-telecommunications-2014.pdf
Hopkin, P. (2013). Risk Management. Kogan Page Publishers.
Walker, R. (2013). Winning with Risk Management. World Scientific.
Edwards, P., & Bowen, P. (2013). Risk Management in Project Organisations. Routledge.
Iverson, D. (2013). Strategic Risk Management: A Practical Guide to Portfolio Risk Management. John Wiley & Sons.
Hong Kong Institute of Bankers (HKIB). (2013). Operational Risk Management. John Wiley & Sons.
Creelman, A.S.J. (2013). Risk-Based Performance Management: Integrating Strategy and Risk Management. Springer.
Delmon, J. (2009). Private Sector Investment in Infrastructure: Project Finance, PPP Projects and Risks, Page 961. Kluwer Law International.
Koulafetis, P. (2017). Modern Credit Risk Management: Theory and Practice. Springer.
In, L. (2009). Handbook of Research on Telecommunications Planning and Management for Business. IGI Global.
Hanseth, O., & Ciborra, C. (2007). Risk, Complexity and ICT. Edward Elgar Publishing.
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