Risk Management Strategies in Optus Communication

Optus Communication, a leading telecommunications organization in Australia, faces significant challenges in its operations. The report highlights the major threats to their operations, including political risk, compliance risk, operations risk, and market risk. To combat these risks, the organization can implement tactics and tools related to marketing, such as celebrity endorsement or discounts, to increase customer outreach. Additionally, the company should focus on implementing a proper IT infrastructure security system, establishing an intrusion detection system, and recruiting officers vigilant about policy changes. Furthermore, compliance with government laws and regulations is crucial to avoid penalties.

Running Head: APPLIED PROJECT 1
Applied Project

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Abstract
The following report is based on Optus telecommunication, a leading telecommunication
company in Australia. The company is operating in telecommunication industry which faces
significant amount of risk. In the present report, the several risks such as market risk, operational
risk and compliance risk has been identified. The telecommunication industry is heavily
regulated and several laws related to under privacy, bandwidth usage and employment are
imposed upon it. It is important for the organization to abide by these laws so that the
government does not impose any penalty. Other than that, the organization also faces market risk
due to low switching cost and large number of competitors. The report has also highlighted
various solutions which can be used to addresss the issue.

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Table of Contents
Brief description of proposed organization:....................................................................................3
Identify the major problems in the organization:............................................................................3
Solutions:.........................................................................................................................................6
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

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Brief description of proposed organization:
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.
Identify the major problems in the organization:
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

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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

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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.

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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).
Solutions:
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.

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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).

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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

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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

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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.

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References
Askew, K., & Lacy, C. (2017). Optus report finds major problems. The Age. [Online]. Available
at: http://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
EY. (2014). Top 10 risks in telecommunications 2014. Retrieved on 14 September 2017 from
http://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.