Porter’s Five forces analysis in telecom industry

1) Bargaining power of buyers: Considering the fact that the costs of services provided in the
telecom industry itself are so low, despite respectable switching costs, consumers can easily
switch between providers if their needs are not satisfied. Hence, due to this reason it can be said
that the bargaining power of buyers in the industry is very high.
2) Bargaining power of suppliers: The ratio of suppliers to buyers is very low, as the suppliers of
technological and vast infrastructure are not easily found. But irrespective of this, suppliers have
no opportunity or chance of forward integration in the market due to the large man power and
capital demanded. Hence, the bargaining power of suppliers is very low in the telecom industry.
3) Threat of new entrants: The telecom industry is a very capital-intensive market, and requires
some brand recognition as it is more or less dominated by some monopolies. Hence, due to the
monopolistic nature of the industry, the threat of new entrants is comparatively less
4) Industry rivalry: Considering that the prices in the telecom industry are very low and more or
less the same for different companies, the rivalry among companies that already exist is quite
high.
5) Threat of substitutes: The services provided by the telecom industry cannot be substituted by
companies in any other industry. Hence, the threat of substitute good here is very low.