Etisalat: An Analysis of Porter's Five Forces Framework

ECONOMICS ASSIGNMENTS

ETISALAT 1
Contents
Introduction....................................................................................................................................3
Porters Five Forces Framework......................................................................................................4
Threat of Entrant.........................................................................................................................4
Power of Suppliers......................................................................................................................5
Power of Buyers.........................................................................................................................6
Availability of substitute.............................................................................................................7
Competitive Rivalry...................................................................................................................8
Conclusion....................................................................................................................................10
References....................................................................................................................................11

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Introduction
Etisalat is the telecommunication company; it is the world leading company in the
telecommunication industry. The company operates in 16 countries across the Middle East and
Africa. It is the 14th largest mobile network operator in the world that was founded as a joint
stock company which works with the British company and international Aeradio. In 2012, it was
the most powerful company in the United Arab Emirates but company structure was changed
after obtaining the 60% ownership of the company by the United Arab Emirates. In 1991, the
Central government granted the companies by providing the wires and wireless services in the
country. As per the Law, the company allowed to issue a license for importing, exporting and
manufacturing the telecommunication equipment. Law "Federal no. 1" is applicable to the
telecommunication industry with the purpose of the economic growth of the country. Therefore,
the corporate network and trade lines are improved from 36000 to 73,700. In 2011, the company
has 140th ranked out of 500 global companies in financial terms and it also has sixth-ranked in
the world largest companies by Middle East Magazines for the revenue and capitalisation
(Etisalat, 2018). The company has a major business hub in UAE for more than forty years which
helps the company to support the new innovation in the technology sector. The company made
the good image in UAE among the first five countries to own the 3D television services. The
company focusing on providing the 4G LTE network to the customers, it also has the fastest
broadband and fixed line network at the speed of 30mbps in the Middle East. The company is
popular for their fastest broadband services which are the fastest speed of about 300Mbps.
Etisalat has the high and effective technology expertise that helps the company to capture the
market segment across the UAE. It makes their presence in Egypt and Saudi Arabia by providing

ETISALAT 3
the fastest services of broadband and mobile networks. The company won the many awards as
the best wholesaler and best operator in the market(Etisalat, 2018).
In this paper, the focus will be given to the external environment in which the Porters five forces
framework model will be explained.
Porters Five Forces Framework
Porter's Five Forces Framework is a model which is used to explain the reason why the other
companies able to achieve a different level of profitability. This model is used to analyse the
company structure as well as its market strategy. The company relation with the internal and
external stakeholder is also analysed. The five forces used to measure the competitive strategy,
attractiveness, and profitability in the market. It focuses will be on the competitive behaviour of
the company to achieve the market opportunity. These forces are Competition in the Industry,
Power of suppliers, Power of Customers, Threat of new entrants, and Potential of new entrants
into the industry (Adi, 2015).
Threat of Entrant
It has been analysed that the telecommunication industry has a less threat of new entrant because
in this industry a huge amount of investment is required for entrance. This industry requires a
large amount of capital to cover the fixed cost. If the bank supports the new companies by giving
loans on less interest then it increases the threat of new entrant. New companies those have a
large amount of capital is the competitor of the company (Al Badi, 2015). New competitors have
an opportunity to grab the market by entering the new service or equipment. Etisalat has less
threat of new entrant the company because it requires a large amount of capital to invest in the
equipment. When there is less opportunity for financial investors then the rate of new entrance is
less but when financial investors support the companies then the rate of new entrants increases.