Exploring Mobile Network Industries

This assignment delves into the complex world of mobile network industries. It requires a thorough examination of various aspects, including competition dynamics, technological advancements driving innovation, and the significant impact of regulatory policies on these sectors. Students are expected to analyze real-world examples and research papers to understand how factors like network externalities, consumer behavior, and global trends shape the landscape of mobile communication.

Running head: BUSINESS REPORT, ZIPTEL LIMITED 1
Business Report, Ziptel, Limited
Name
Institution

BUSINESS REPORT, ZIPTEL LIMITED 2
Acknowledgement
Special thanks to the following;
 Course tutor
 The management of Ziptel Limited
 Course mates- 2017

BUSINESS REPORT, ZIPTEL LIMITED 3
Table of Contents
Acknowledgement...........................................................................................................................2
Introduction......................................................................................................................................4
Historical background and location.................................................................................................4
Business products and services........................................................................................................6
Consumer base.................................................................................................................................6
Competitors......................................................................................................................................7
Production cost and scale...............................................................................................................11
Macro business environment.........................................................................................................11
Sustainability practice of the business...........................................................................................13
Conclusion.....................................................................................................................................14
References......................................................................................................................................15

BUSINESS REPORT, ZIPTEL LIMITED 4
Introduction
Australia is presumably one of fastest urbanizing country in the world. Located in the
region of Asia-Pacific. Strategically placed with S.America, Africa and Europe. Australia is well
developed with democracy forming the core of its existence. Its openness to competition attracts
business investors. Australia enjoys great political stability in the region thereby encouraging
business activities even with neighbors. The economy of Australia is undoubtedly supported by
the long-lasting peace and economic links forged with Europe, South and North Americas, and
Middle East. Peaceful politics and strong financial organization grilled on good governance
provides favorable business environment. Australia is strategically placed to gain the advantages
of the increasing opportunities in the expanse. The suitability of the business environment in
Australia is encouraging to big and small sized companies since safety is assured and even
government policies are by all means attractive to business activities. Ziptel Limited is one of the
companies located in Subiaco, Australia
Historical background and location
Ziptel limited was in earlier times known as Beyond Sportswear International before it
changed its name to Skywards Limited. It was founded in the year 2004. It has its headquarters
in Subiaco, Australia. It is run and managed by a board of directors with Umberto Mendello as
the Chief Executive Officer. The ownership structure is as follows; the shareholders are the real
owners of Ziptel. Institutional owners control the largest number of shares in the company
followed by Insider owners who are simply the managers but not real owners of company. They
hold a stake of about 14% of the shares of the company. The General Public owners hold a stake
of 64% of the total number of share capital. They play a vital role in the company policies and
decision making including directors’ salaries and even consenting to decisions that may lead to

BUSINESS REPORT, ZIPTEL LIMITED 5
profitability. Private Company Owners is another group of owners from other companies who
have had interest in Zip. They hold a stake of about 12.7% of the total share capital of the
company. Currently Ziptel Limited is a listed company in Australian Stock Exchange Market
(Bilbao-Osorio, Dutta & Lanvin, 2013, April).
The previous financial period has been a challenging one with technological companies
and therefore, Ziptel was no different. However, it has been able to keep track of progress
amidst the myriad challenges by realizing about 10 million plus users installing the Zip APP.
From the previous financial period, the company recorded an increment in revenue by 53%,
though there was still a loss of $ 14009,805 (Annual Report, 2016). The better part of loss went
into payment related expenses and share related. Generally, the company has made meaningful
use of its financial resources after the stock exchange listing. Below is its financial summary; for
the financial year ending 30th, June 2017, Ziptel Limited had a reduction in revenue by 72%. The
net loss also reduced by 96 %( Annual Report, 2016). The loss is as a result of a reduction in
quantity demanded for the products as a result of unfair market circumstances. The decrease in
loss reflects a reduction in payments for marketing expenses, distribution and research expenses.
Below is a balance sheet of Zipt constructed as at 30/06/2017 in billion Dollars.
June 30, 2017 Dec 31, 2016
Total assets 1.26 1.34
Liabilities totals 0.49 0.75
Capital 0.77 0.59
(Half and Yearly Financial Report 2016/2017)

BUSINESS REPORT, ZIPTEL LIMITED 6
The total assets have decreased by 5.9% due to the loss experienced, the total liabilities have also
reduced significantly as a result of loan repayment and capital increased by 18% due to
additional ordinary shares hence increased capital base.
Business products and services
The company runs in two sections: Aussie sim and ZipT. The Aussie sim provides
prepaid services to oversea travelers so as to void huge bills. Aussie offers reduced rates of
roaming to consumers for calling texting and data services up to about 90% compared to other
telecommunication companies in Australia (Annual Report, 2016). It is also providing other
infrastructures that enable users to receive calls internationally while traveling. ZipT provides an
application that offers VOIP services to clients for calls and short message services at the lowest
cost. Zip App is capable of being installed in any smartphone and requires no presence of a
simcard. Its data usage is extremely low compared to parallel products in the telecommunication
market. Therefore, Key products of Ziptel are Aussie sim card and RoamEzy. Ziptel enables
travelers to use its network for calling, data services and texting short messages. Fast-forward, an
agreement has also been signed with SpeedCast to white brand Zipt software as SpeedTalk.
SpeedCast has also scheduled a piloting program to discharge SpeedTalk. A deal has also been
struck with Samsung Company to port with SpeedCast.
Consumer base
During the 2016 financial year, 10 million plus users have had Zipt installation into their
smartphones (Annual Report, 2016). Ziptel enjoys greater percentage of Indians as its market
because most of the Indians are using smart phones with Zipt App. Also S.Africa, West Indies,
S.America and Europe form part Zipt’s market share. International travelers from Australia and
outside also use the products. Ambassadors have also been brought forth including prominent

BUSINESS REPORT, ZIPTEL LIMITED 7
sports celebrities like Gareth Bale to spearhead the mission of Ziptel and market the notable and
vastly coveted products of the company.
Competitors
Queste communication limited which supplies telephone softwares, voice over internet
protocols. etc., Primus Teleco based in Melbourne. Provides telephone services web hosting,
data and internet services. Singtel offering internet services over fixed and wireless media. M2
telecommunications group which operates as a retailer and wholesaler of fixed line telephone
services. The above mentioned companies depict a land scape competition involving outbound
results. These operators provide roaming solutions to their clients internationally. Within the
country, network operators also provide roaming solutions when a traveler lands at their destined
points for example Vodafone. Wi-Fi solutions also pose a great threat by providing similar
services e.g.Fon (Alizadeh, Shearer & Sipe,2015 ) .There are also other different MVNO
providers that concentrate on the market gaps like voice on internet protocol, small and medium
sized business that are price driven and Security and Enterprise.
Australian Stock Exchange listed competitors: Norwood Communications Limited offers
telecommunication products. Offers roaming services, online network Apps and mobile
products. It is headquartered in Perth. It has a revenue collection of about $ 703300 in the
previous financial period 2016. Flexiroam Limited which is an international company with its
headquarter in Perth It involves in the provision of unliminet international data flat cost services
and voice calls to those traveling outside the country. In the previous financial period it gained a
revenue share of $ 4,557,400 from the total sales. Telstra Corporation, offers communication
services within and without Australia. It gives stable mobile infrastructural networks, distant call
services, distribution of cables in wholesale, 3G networks as well as network management. In the

BUSINESS REPORT, ZIPTEL LIMITED 8
financial year, it had a revenue of about $ 25.6 billion. Ziptel focuses on the provision of
international call solutions and roamig services. In the previous financial year it collected total
revenue of about $ 762380 (United Networks Limited Report, 2017).
Total market share = (703386+4,557,407+25.6 billion+762380) = $ 31.62308 billion
Market percentage=
Norwood: 0.7033/31.62308*100 =2.2%
Flexiroam: 4.5574/31.62308*100 =14%
Ziptel : 0.762380/31.62308*100 =2.4%
Telstra : 25.6/31.62308*100 =80%
The pie chart below shows the market share by the key competitors of Ziptel in Australia.
Telstra controls the largest share followed by Flexiroam with a wide range. The revenues from
sales were collected from United Statistics of Telecommunication. Ziptel seemingly does not
enjoy a wide range of market Australia or may be it is still growing to tap into market
opportunities.

BUSINESS REPORT, ZIPTEL LIMITED 9
(Figures adopted from United Networks Limited, 2017)
The market structure in which Ziptel Company operates is likely to be a perfect
competitive market. Because, first it has many buyers and sellers selling similar products for
example Vodafone is offering similar products that are provided by Ziptel. Secondly, the
services and products supplied are homogeneous that is, are close substitutes, similar and
identical for example, Flexiroam and Ziptel both provide unlimited voice calls to the travelers.
Thirdly, there is no government interference since there no price controls issues. Any company,
as many as they are, can charge prices of their own choice like Ziptel is charging the lowest in
terms of the call rates. There is free exit and entry into the market. Small and medium sized
company come and leave at their own will buyers alike. Lastly, both buyers and sellers have

BUSINESS REPORT, ZIPTEL LIMITED 10
perfect knowledge about the market (Nogueira & Jorge, 2016). Therefore, this market is likely to
be a perfect competitive market.
Monopoly is a market composition which has only one seller or supplier of a product or
service which does not have substitutes. In this market, monopoly seems to be crawling in as
evidenced by the way Telstra is gaining almost half plus share of the market. It controls more
than 80% of the total market share. Also, due to economies of scale, Ziptel is able to sell at low
prices thereby locking out other competitors from the market.
The number of close substitutes are flooding telecommunication industry especially the
market in which Ziptel operates. With increase in the number of substitutes, an increase in the
price of the Zip’s products would mean a decrease in the quantity demanded for its products and
if the price is reduced, there would an increase in the quantity demanded for example if quantity
demanded increases by 10% with an reduction in price by 2%, the elasticity of demand would be
given by;
Quantity demanded increment/ price reduction =10/2 =5 Elasticity= 5. When elasticity
increases more the price, it means that the consumers are more responsive to changes in price
and therefore, the quantity demanded would also increase. The demand curve facing Ziptel
Limited, therefore, be relatively elastic.
When the price set above the marginal cost with constant consumers’ income and in the
face of close substitutes, the consumers will probably go for the substitutes or they will not be
responsive to changes in the price. When there is increase in demand with changes in price, the
inelasticity comes in consequently, the demand curve that will be facing Ziptel will relatively be
inelastic.

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Production cost and scale
There are three required factors of production; capital, land and labor. Under capital there
is motor vehicle, equipment and machines (fixed factors). Land (fixed) and labor: fixed salaries
(fixed), benefits (variable) (Isidori & Trott, 2014).
The Factors of Production (fp) and Costs are herein summarized in the table below.
Factors of production Fixed fp Variable fp Fixed cost
$million
Variable
cost
$million
Total cost
$million
Land  40473 40473
Capital; building, vehicle  1151345 1151345
Labor   1099900.02 899938 1999838.02
Total cost of factors 22291718 899938 21191656
(Source, Annual Report, 2016- Financial statement p 45)
According to the table above, as adopted from the previous financial statement, the fixed costs is
higher than the variable cost. This is an indication that Ziptel Limited is a big company covering
not only Australia but also internationally.
Macro business environment
Australia has a bright free market economy and has registered an imperative economic
growth uninterrupted with economic downturn for close to 25 years. Also, the availability of
plenty economic resources coupled with good governance and legal structure keeps the country
on a higher transcendental path of entrepreneurial development. The Australian economic system
being free and open, attracts even foreign investors into its market with hope of realizing a

BUSINESS REPORT, ZIPTEL LIMITED 12
successful business venture. The government has from time to time privatized most of its sectors
thereby augmenting financial services in the economy. Even though there has been an increment
in the size of debt, the Australian government has consistently put checks to ensure that it
remains as low as possible as, lower than her contemporary countries. Australia is one among the
wealthy nations in the Asia-Pacific, therefore, raising its competition to the international level in
manufactured goods, technologies and other services. Agriculture and mines forms the basis of
Australian export.
The stable policies are of great importance in safeguarding property of individuals and
has reduced corruption to its minimum level. Expropriations are minimal going by the strict
contract enforcement policies. The judicial effectiveness pillars the rule of law as demonstrated
in its impartial discharge of duties thereby elevating the confidence of foreign investors who may
have been scared of corrupt deals in the business environment. The Australia’s regulations in the
business environment is the most effective, efficient and simple as it only involves few steps to
start a business. The labor market runs smoothly with the help of efficient and flexible codes of
employment. The Central Bank of Australia (Reserve Bank) has also worked tirelessly and
cutely to ensure that inflation remains under check. Unemployment rate in Australia remains
fixed in spite of constant job creation. It stands at 5.7% even as more jobs are created to absorb
youths in both permanent and temporary job positions. From May, 2017 the prices have risen by
0.2% against the first quarter of the year thereby coming lower than the expected market value of
0.4 %( Menkhoff, Sarno, Schmeling, & Schrimpf, 2016). The inflation dropped from 2.1% up to
1.89% according to the Bureau of Statistics of Australia. For the time being, inflation has risen
from 1.5% to 1.8% in the first and second quarter of the year 2017 (Pagan & Wilcox, 2015).

BUSINESS REPORT, ZIPTEL LIMITED 13
Australian Dollar has improved since the second quarter of the year 2017. The improved
exchanged rate is expected to reduce the increased prices in the country further considering the
viewpoint of unemployment and productivity. With an improved exchange rate there is
likelihood of increased productivity thereby creating an employment for the youths. The steady
unemployment rate of 5.7% may drop. The economy is seemingly on boom (Bishop, & Cassidy,
2017).
The current exchange rate between Australia and India is 50.3 Indian Rupees for exports
and 52.10 Australian Dollars for imports. It is prudent and profitable to for Ziptel’s products to
be imported by Indians than for the company to export (Shastri, 2016).
The macroeconomic environment faced by Ziptel in Australia would mostly likely
remain normal because of improved interest rates which will consequently appreciate the value
the main products for the consumer countries like India. The products will still be relevant in the
coming years. However, the demand for Ziptel’s products my fall during recession going by the
exchange rate of the Indian Rupees.
The macroeconomic environment faced by the firm is likely to make available factors of
production. The improved interest rate will spur economic activities in the country leading to
increased educational opportunities thereby availing the required manpower for industry. The
operating costs will definitely increase due to skilled manpower with advanced technology.
When the business, that is, Ziptel exports its products to India. The products will fetch
higher prices in India going by the exchange rates and this will be able to meet costs on the side
of the company hence profitable. If the company imports factors of production like equipment.
The company will cheaply buy it from India due to the low value of the Indian currency.

BUSINESS REPORT, ZIPTEL LIMITED 14
Sustainability practice of the business
Sustainable business is one that is committed to ensuring a better society in future. A
business while doing its activities, it generates both positive and negative externalities. A
business therefore should be conscious of its contribution to the environment (Osborne, Radnor,
Vidal & Kinder, 2014).
The production process of Ziptel Limited has resulted to positive network externalities.
For example, subscribers of other networks enjoy free calls from another network subscribers.
The business takes advantage of that externality by inviting more subscribers to join so that
many can be contacted, and when many are contacted, their bills across the the network increases
hence profit to the business (Hurkens & López, 2014).
The process of production results in unavailability of supporting services for example,
ZipT App requires other services so as to efficiently operate. The company contracted Samsung
to port with SpeedCast so as to harness its operation hence mitigating the loophole.
The business sustainability practice by firms in the same industry would be to react by
putting in place price discrimination. The benefiting firm would lower the price on on-net as well
as off-net calls so as to prevent entry of new competitors.
The long-term sustainability of Ziptel lies on its ability to meet the needs of tomorrow with
innovativeness. Seeking solutions that are innovative in nature and focusing on the ongoing
improvements in technological advancements and financial management and further looking
into the consumers’ and societal needs through constant extensive research.
Conclusion
Over the past years, Australia have had a long period of political and economic stability
both with herself and the neighbors. This has provided a conducive environment for business.

BUSINESS REPORT, ZIPTEL LIMITED 15
The technological advancement has also encouraged growth of industries like telecommunication
industries, among them is Ziptel Limited. Because of the conducive conditions in Australia,
Ziptel Limited has realized growth beyond the borders of Asia-Pacific. Even though in the past
financial years, it has been facing various challenges, the Board of Directors has not relented in
ensuring good performance. Ziptel Limited is on the upward trend with many more consumers
coming on board to use its products and services at the lowest cost possible. The stiff
competition in the Australian telecommunication sector is welcoming on the side of the
consumers since it ensures fair pricing as well as quality services and products. However, the
management of the company ought to check its competition intelligence in the market it is
operating in or otherwise face the sting of stiff competition since the Australian economy offers
an enabling environment for competitive market.

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